Is long-term value investing more profitable than shorter-term trading?

Discussion in 'Economics' started by learner88, Dec 29, 2017.

  1. Gambit


    Is this what you're doing?
    #21     Dec 30, 2017
    comagnum likes this.
  2. toc


    Somewhere I also read that it has been proven statistically that more you day trade, the more your probabilities of winning trades go down.

    Do not know in depth of this logic but it does make sense given the mental toll day trading can take leading to "unforced errors" in decision making.

    Also, look at the numbers of CTAs, CPOs and Hedge Fund managers of Forex and other fast lane instruments. Even these what so called Ivy League and well experienced "Top Guns" are not able to return consistently 20% a year and can't blame the "mere size" of the fund alone. Numbers are pretty consistent for AUM of $1M to $50M to $500M.

    Best returns out there are 401(k) with 100% matching by the employer. Tax free growth until withdrawl and even 5-7%/year appreciation does lots of good.
    Last edited: Dec 30, 2017
    #22     Dec 30, 2017
    cvds16 likes this.
  3. Gambit


    Makes sense. Add in costs like spreads and commissions.
    #23     Dec 30, 2017
  4. sle


    That's what most successful professionals are doing these days. Instead of searching for that one holy grail, you get a bunch of passable vessels - some made of porcelain and some are tin cups, but as a combination they tend to be as good as a holy grail is.
    #24     Dec 30, 2017
    piezoe, MACD, lovethetrade and 4 others like this.
  5. Gambit


    Thanks for your input. I kind of got that impression from reading AQR's blog and Anti Ilmanen's work.
    #25     Dec 30, 2017
  6. Gambit


    Thanks for the tip.
    #26     Dec 30, 2017
    comagnum likes this.
  7. learner88


    Thanks. This is good advice. Have different tricks in the bag to prosper in different kinds of market conditions, though it takes skill to recognize what tricks to apply in what kind of market. Many value investors say market timing is impossible, so they usually stay invested throughout.

    #27     Dec 30, 2017
  8. learner88 is risking to never achieve your`ve just set the goal for him.
    Do you become investor once your trade goes against you?:D:D:D
    #28     Dec 30, 2017
  9. Simples


    Just to balance the talk about investing being so easy and sound and less cost etc., I've seen people holding and adding all the way to 0-1, in the hopes that this time the company (a solar one) would go up, because "it's the future" (and it is, definately, just not this particular one...). Of course, the industry got exported to China and low cost production (fundamental shift), so this stock just kept going down, not following the "bull market" at all.

    So while you hear alot of these so-called "bull markets", you can get stuck with poor performers and it's lethal to add on the way down. Only in hindsight do these bull markets exist, and they don't mean every stock was winning. The losing stocks just got devalued away from the index while the rising market caps kept pushing the index upward! Thus "bull market" was born. Exchanges are designed that way they ensure a rising market, along with inflation and other devaluing techniques out there.
    #29     Dec 31, 2017
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  10. Handle123


    Sometimes you start out thinking it be short term trade, but I am still holding onto stocks from 2009, so does that make me an investor? But I have added on various times and started dumping half of new position at so much profit and keep other half, to now taking profit at 90% and holding 10%. Either be a genius if market tanks in next year or robbed myself of much if don't. But I also look at it this way, where can I make the most in terms of cash as it costs so much trading stocks than commodities cause margins less in commodities but fees certainly more in commodities cause of rolling over. I don't think of tax issues as 98% in 401k LLC.

    I do something very much the same and done well but with sectors of the S&P 500, I believe there are 13 sectors, if a sector been 4 of 5 years in lowest 2 levels, last trading day of last year, whatever I had in that account is exited and new ones get bought, if there are no sectors that met rules, if there was any stocks for the year, they are exited. I don't hedge them and no stops used and don't check them for three months.

    Last two years have sold off my real estate holdings that was in my 401k LLC, wanting to go different direction in my life, it truly amazing that at some point everyday problems of owning a business, are not problems as you have all the answers from years of doing it. And when you started from ground up, no one can slip a fast one on you.

    Hope all have a Better New Year.
    #30     Jan 1, 2018
    beginner66 and comagnum like this.