This is tragic. Investors pulled out of stocks when they were low, and then invested in bond funds and lost there too. I hope the lesson is learned. The correct lesson is not to stay away from stocks or bond funds or any other particular investment. Rather, the lesson is to not follow the herd, and to not sell low or buy high. These investors forgot to be proper contrarians.
Current year-to-date return: 15.2%
They say we should buy low and sell high, but almost no one does it. So as my stock holdings crashed in 2008 I thought to myself, what if I tried it? What if I actually buy stocks when they are low and sell them when they are high, instead of just saying one ought to? It may be crazy but that is just the real life experiment unfolding here. In 30 short years we shall know the answer! Here are the results so far.
2010 Rate of Return: 17.0% (S&P 500 was 14.72% Total Return)
2009 Rate of Return: 29.4% (S&P 500 was 26.46% Total Return)
2009 Rate of Return: 29.4% (S&P 500 was 26.46% Total Return)
Sunday, December 12, 2010
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