Investing is like watching paint dry

Published 22.08.2019 в Analyse forex euro franc suisse

investing is like watching paint dry

“ Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $ and go to Las Vegas.” – Paul Samuelson. Investing should be like watching paint dry The voice on the telephone says, “So, you don't like the 1% rate you're getting on your bank savings. Investing should be more like watching paint dry or watching grass grow. October 13, in Social 0 · 5 by 5 rule · ThreeSixty Research Market. CALENDARIO MACROECONOMICO FOREX FACILE MEANING

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Investing is like watching paint dry ethereal definiton

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Instead, once you find a company worth investing in, stick with it. Simmons agrees. It's like watching paint dry, and it will give you a heart attack. You're not going to miss some opportunity if you don't invest today. Lauren Simmons "You're not going to miss some opportunity if you don't invest today," she says. Simmons emphasizes the importance of understanding your risk tolerance as well. If you have a high risk tolerance, you may be OK investing in speculative assets like crypto, Simmons explains, while a more conservative investor may stick to putting money in savings accounts, despite the low interest rates.

Most investors will fall somewhere in between, investing in a mix of bonds and equities, based on their individual goals. Robinhood investors and Bogleheads will both suffer severe losses for somewhat different reasons. Bogleheads are overreliant upon the glory of past decades.

John Bogle himself decried the existence of those who took his excellent idea about index investing and badly distorted it. John Bogle sold all of his aggressive-growth shares in and also unloaded most of his stocks shortly before his passing in because he astutely recognized that there is sometimes far too much risk in the financial markets.

It's too bad that most of today's Boglehead investors haven't considered that if you had been invested in the U. The only true periods of dramatic outperformance for the U. Even with its huge gain in recent years, if you are long a basket of Nasdaq stocks which you have owned continuously since the peak on March 10, then you are only marginally ahead after adjusting for inflation.

People are repeatedly underinvested whenever bull-market gains are about to be greatest and dangerously overinvested near the beginning of all major downtrends. They usually have an agenda, open or hidden, of creating an illusion that "stocks always go up in the long run. So the vast majority of investors got little benefit from the two huge bull markets of the past century while there was massive participation on the downside in and With everyone nearly fully invested today we are set perfectly for a massive aggregate loss of wealth over the next few years.

Safe-haven assets have quietly completed important bottoming patterns. VIX, a measure of implied volatility, has been steadily making dozens of higher lows since the final months of The U. In July the U. It is probably no coincidence that the January 6, bottom for the U.

The most-experienced investors are among the few who have embraced the U. Treasuries, likely completed important bottoms around noon on January 12, Top U. These very-experienced investors have been increasingly accumulating the safest havens while they are still significantly undervalued. In every bull market the most-capable participants buy first, followed gradually down the food chain until the least-knowledgeable novices are piling in near the top. In a bear market the savviest investors get out earliest, followed all the way down the line until the least-experienced traders end up setting all-time records for net outflows near the bottom of the cycle.

Real estate worldwide is completing its second major bubble of the 21st century. The real-estate bubble featured subprime mortgages and liar loans. The real-estate bubble is notable for record-low mortgage rates and the easy availability of credit and zero down payments. The most important similarity between and is that the ratio of U.

Much of this data including the detailed Herengracht study which began in and Case-Shiller backdating to spans centuries and even millennia, since real-estate prices have been recorded throughout written history. In one heard frequently about how "foreign buyers" would enable real-estate prices to be perpetually elevated; by many of these buyers had become sellers. Today you hear repeatedly about how people "from away" are eagerly buying but no one mentions how those with no long-term connection to a place are much less likely to hold on during periods of falling valuations.

No asset which is more than double its fair value can sustain such a high price regardless of whether it's real estate, stocks, commodities, or anything else. Intraday behavior highlights eager opening-bell buying which characterizes nearly all tops. If you look at intraday charts of most risk assets in March then you will quickly discover that the least-experienced investors who were panicking out of the market nearly all did so near the opening bell, especially on Mondays when investors had been worrying all weekend about how much lower the market might retreat and had placed massive market orders to sell.

Near bubble peaks in March and again in recent weeks we have repeatedly experienced the highest prices of the cycle near the opening bell when the least-experienced recent investors are most excited about how much money they're going to make. Recently similar absurd extrapolations have become commonplace. Many of today's investors were in high school or younger during the and earlier bear markets.

The huge surge of new investors in less than one year, just as in and , have mostly never experienced a bear market. Many of them were in school when the last bear market occurred so it seems emotionally distant. Now they'll have a front-row seat to the carnage which will affect so many of them directly.

It's not just the newby investors who are convinced of invincibility but many long-time baby boomers who should know better. If you look at the comments below and on my other essays on Seeking Alpha then you will quickly discover that those who are most optimistic about future risk-asset valuations are not just those who have never personally experienced bear markets. Many investors who lived through the huge collapses of and , and who may have lost significant percentages of their net worth during those bear markets, have convinced themselves that "because of the Fed" or "since you have to put your money somewhere" or "with all of that cash still out there" or "since assets have to climb in the long run" that they're going to come out ahead even if they enter or hold their positions near their most-overvalued levels in history.

All major market tops and bottoms must be accompanied by widespread delusions that a current unsustainable over- or undervalued extreme can persist indefinitely. The biggest percentage losses have always occurred whenever there was the highest level of overconfidence in future gains while the most dramatic percentage gains have happened in an atmosphere of maximum pessimism.