Actual Facts

Michael published an important reminder last night, some actual facts that are undeniable and must be reckoned with by all market participants – buy and hold is simple but not easy. There are periods of time, like the one depicted in the chart below, during which your patience will earn you nothing:

Below is the Dow Jones Industrial Average from 1966-1981. Over this 16 year period, the Dow fell 9% (gained 10% including dividends). Investors who took risk were rewarded with a ton of risk. This can happen. When you buy and you hold, you can expect stock-like volatility. Returns however, are not guaranteed.

But the answer to this is probably not “trading” for most people, because trading is even harder than accepting no return for taking risk. If you know someone who perfectly nailed yesterday’s action, they deserve a Nobel Prize. If you know someone who not only nailed yesterday’s action, but have a process that can allow them to do this repeatedly, they will ultimately become a trillionaire.

 Because it was ludicrous, devoid of any meaningful signals, rhymes or reasons.

Here’s Michael writing at the close:

Last week, the S&P 500 had its worst week in over two years. 4.5% of the week’s 6% decline came during the last two days alone. If you are an active market participant, I assume you took your equity exposure down.

And today, when the S&P 500 gapped up 1.2%, you were probably hoping for the fade, which you got. By 11:15, it had declined 1.4% from its morning highs. And then it rallied 2.18% for the rest of the day, closing near the highs.

Those are huge percentage falls and leaps, occurring at random and most likely driven by software programs and algorithms that do not concern themselves with wrapping up their reasoning into a tidy little bow of logic. And the remainder of market actors – including other software programs – get dragged along with them.

Make sure you read his whole post.

These are actual facts. No way around them.

Source:

Sometimes This Sucks (The Irrelevant Investor)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. red wigs commented on Sep 18

    … [Trackback]

    […] Find More here on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  2. Blazing Speed Trader review commented on Sep 23

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  3. immediate edge commented on Sep 25

    … [Trackback]

    […] Here you can find 99445 more Information on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  4. click here commented on Sep 30

    … [Trackback]

    […] Read More Information here on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  5. Arcade games for sale commented on Oct 14

    … [Trackback]

    […] Find More on on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  6. 사설토토 commented on Oct 16

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  7. 먹튀검증방법 commented on Nov 07

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  8. 먹튀사이트 commented on Nov 11

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  9. td easy web commented on Nov 22

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  10. What is intelligent automation commented on Nov 28

    … [Trackback]

    […] Here you will find 40806 more Info on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  11. td easyweb online commented on Dec 08

    … [Trackback]

    […] Read More Info here on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  12. cbd for anxiety commented on Jan 02

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]

  13. https://library.kiu.ac.ug/ commented on Jan 05

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2018/03/27/actual-facts/ […]