Challenging the Idea of Index Funds

Fixed.

 

So parsing through this my takeaway is that OP doesn’t trust the financial system to last without Wazza to get involved, is scared of capital volatility and is relying on technical analysis to time the market. Fair enough.

The subject is misleading though, this has nothing to do with index funds, and the precept of 40-50% drawdowns every 8-10 years is clearly wrong.

 

In a strong bull market, any idiot can make money from buy and hold.

doesnt mean everyone who does buy and hold is an idiot.

 

Extremely important in what way?

 

Was hearing and thinking the same thing last year. And as we know the US market finished up something like 30%. Will this be the year it corrects? Maybe. Or maybe next year.

If we get a 20% correction this year it would only take you back to what we were at early last year. So as long as you went along for last years 30% rise you can afford to take this years 20% hit. Unless you tried to time last year and missed the 30% rise and now you cant afford the possible 20% hit.

Moral of the story. No one knows when the next run up or down is. But I will watch your prediction for the week ahead closely. Your analysis is saying something is just around the corner? Does it tell you how big this turn around is and how long it will last for?

I mean we could see a 5% drop this week. But then a 3% recovery the following week. Does that count as market turnaround? Without specific details of how you expect it to play out its hard to gauge whether the forecasting is or was actually accurate.

 

From this excellent post by @dunno:

Dow Breaches 23,000 [International]

 

Wasn't that surely proved in 1973, 1987, 2000, 2008 and various other "corrections."

That said, if someone holds a particular view, despite others disagreeing with it, go for it. Not everyone has to do the same thing when investing their funds. But it would be nice if there was clarity and no Nostradamus type quatrains.

I expect large movements in the personal holdings when a tech person predicts a downwards movement. Doesn't make sense to hold anything tomorrow if there is to be one. Why wait for it to happen and then sell if the numbers hold true?

 

Nothing like a bit of technical analysis to convince me no one has any idea what the future holds

 

Lewis, with charts maybe do a search within this site as there are a few that are very good with charts and both were posting up till a few months ago and the way i read those charts they became sellers ,going from contributing money to taking it off the table and that may have proved a master stroke of timing from an investor and financials perspective ..The jury is still out on those charts and the process of self-analysis..

Why this week, and why compare the dot com bust to now as i know full well the date time One.Tel went bust on the 28th May 2001..?..If possible can you post your charts if not then it's full steam ahead..

Quote --William Shakespeare..part 2 ..King Henry the 4th..
''Uneasy lies the head that wears a crown''

 

I love chartists.

They trade the market and make it efficient so I can ride along for a low cost and no effort.

If they make more money than me that is fine. I know some will.

 

Yeah gotta love indexing. All those buyers / sellers out there working their butts off allowing the index investor to reap the benefits with no effort and bugger all cost.

 

Hmmm,that's a interesting way to look at the way it works once one realise all the bureaucracy involved and the laborious nature of the process ..

 

So did anyone cash out in Jan 2019?

 

Why Jan 2019? Was it a big drop then? No I have been buying more since

 

Timing the market does not necessarily involve technical analysis or any other fancy mumbo jumbo.
With a chart that's expected to trend up the main action is buy.
It can simply be done by leveraging on the way down and deleveragin on the way up or a nuber of different methods.

Building your own portfolio means you get to choose when and if you pay CG and what to keep instead of for eg selling FMG way before it peaked, and then buying back at 30% lower.

"Index funds are for people who don't know what they're doing" W Buffett
"You will will always be below the averages if you buy at all time highs" C Munger