Not true. At some point all declines will bounce. Some will just blast away higher, and if you don't "chase the bounce", you get left in the dust. All you know is the "setup". You don't ever know for far it will carry or how long it will last. You have to evaluate that on the fly.
The commonly quoted figures on market return are normally around 9 percent and this was the market return for the market durring the existence of Berkshire Hathaway. Certainly most people involved in the market are far better off buying and holding. My advice to most very young people would be similar to Warren Buffett's: periodically buy Berkshire Hathaway and plan on holding for 30-plus years. Buffett actually advises doing this with low fee index funds and is leaving 90 percent of his wife's inheritance in this fashion. The reasons I say this are many: Historically we know most daytraders lose and most longer term traders have done worse than the market. If you believe our country has and figures to keep a reasonable business culture and business ownership will continue to be a good idea. Etc... Another factor is this: Large wealth that wishes to be involved in the market can not trade it all Warnings And Exceptions: Renaissance Technologies, please ignore my advice! George Soros and Stanley Druckenmiller, please ignore my advice! * Most people will never have the ability and inclination to be market crushing winning traders. ** A much larger percentage of people can be taught to click the Max Market buttons on their 401K and then close their eyes. Or... simply follow my posted advice which for most is far superior than trading.
The last 9 year period is certainly not typical behaviour of the major indices over the average 9 years. - Well Yes it was beacuse Dow Jones 30 & FTSE 100 both these Instruments - Have covered the same period as of A Swing High Phase over the same period of time. You will only be able to quantify the dips at Random Levels because Metric Length Calculation to Swing Lows proved - As inferior to the S&P 500 as well charting the Derivative through Charting Pattern Formation failed miserably as well. So at A Guess and The only chance in becoming successful at these type of entries - You are saying that you were cap-able of success by buying on the dips. Is that the point you are making - And if you were ? - Holds NO Valid Point - As to any sense what so ever - It is far better to hold on to the position throw the Long Term Than just for keep Trying sake participate in just trying to be A Clever Sod. - Now Dose That Answer the Point You Have Made Here. ?
You use terms we probably don't have an agreed definition for and I'm not sure I understand you. However, what I am saying is if you buy something at 10,000 and it goes up or down 1000 and you hold it until it goes back to 10,000, you've made zero. If you buy at 10k and it drops to 9k, and you hold it until 8k, you're down 2k. But if as a trader you followed the trends, going long in the uptrends and short in the downtrends, you'd have made money under all these scenarios.
I don't think it's possible to compare our present markets to historic market data via long term returns, simply because we are in a situation that we've never been in before. Never in our nations history have we had this much debt. Look at the US personal savings rate, checkout Medicare, and SS , it's terribly underfunded. Does T/A work? It does sometimes and sometimes it doesn't - what matters is when you get a set up you take your shot. Whatever that set up means to you.... Remember, It's your money so it should be your rules.... Just make sure your protected because nobody can tell you what's going to happen next. Lastly, reading some of the more recent posts I have to ask what's becoming of ET why are so many people angry on this site?
I think we are long overdue for a world depression, and when interest rates goes up, USA will not be able to come up with enough funds as we stand right now to pay off the interest let alone any of the principle. Am sure other countries are in deep as well, maybe not as much China, but we made the China problem by having them make cheap goods and no equality of trade. There is no fair trade when one country just keeps taking it in and not enough going out, so then we have closed down so many factories. USA has become a service society. And next step is when we will no longer be driving cars or trucks-all GPS, there goes another one million jobs.