It's a very long game China.....will let you know in 30 years.
High Yielding Shares Again
- Thread starter MTR
- Start date
It's a very long game China.....will let you know in 30 years.
No, because some years some will do better than others, but as it's cyclical you won't know in advance which are going to outperform. And those that do, don't do it consistently over very long time frames
This chart from vanguard illustrates it better:
https://www.vanguardinvestments.com.au/adviser/tools/adv/assetclass/AssetClassTool.jsp
1. Individual stocks can lose in one day what the index might lose in a year
2. Individual stocks can make in one day what the index might make in a year
Buying individual stocks gives you the chance to get the highest returns, but also a risk of the largest losses. With an index tracking fund you won't get the highest nor the lowest returns
No - because things generally go in cycles. While some become super cycles, most out performance of a company / sector / strategy is generally followed by under performance purely for the fact that there is less upside left.
Of course there are notable exceptions to this rule but the generality still stands.
This is why index investing works - you are buying tomorrow's big winners alongside the losers so it all evens out in the wash. If you could predict the big winners with any accuracy that would be a better option but the number of people who can consistently do this is tiny and there is no certainty that they weren't just the lucky ones who were able to step over everyone else as a result.
I suggest having a read of "A Random Walk down Wall St" to get a better handle on the powers of prediction and randomness.
+1
Just look at recent winners from the GFC. People like John Paulson who made a fortune betting against subprime loans and then betting heavily on Gold are now running funds at heavy losses.
What does this say? Was there an element of luck involved in their bets since they can't seem to keep repeating their winning bets consistently? I will let you be the judge.
Cheers,
Oracle.
A great starting point. Then "Common sense on mutual funds" for more detail.
totally agree.
And with individual stocks you need to pay the most attention to those individual stocks which might interfere with your day job.
Anz (I know you're invested in) and Nab faired well going ex - dividend today. Wow and Bhp were good climbers too. Hold out for some profit, then get into a plan where you compound without worrying about price action.
pinkboy
You have entered a marathon by investing in blue chip stocks, not a sprint. There is no need to evaluate performance after each single step you take. Wait until the mile markers (big dips or rises) at least.
Characters................
I think the plan as suggested in this thread, half ETFs and half direct stocks, seems like a good plan.
And stop checking them every day!
Not dissimilar to people checking out surf reports, cricket scores hourly, horse race results, soccer scores, Facebook profiles - I just like checking out stock prices.
Its different to those things because those are all one off occurrences. You need to have faith in long term compounding growth if you want wealth.
There's nothing wrong with checking stock prices frequently. The only problem with it is if you are prone to get strong urges to react (buy or sell) to the daily price fluctuations.
That's the realistic way to look at things- because if everything is predictive as some think,and periodically you get the sharp quick pullbacks then you see them before they happen,because large deviations happen every week just work out your own trading style some in the media internet print are considered geniuses with the highest levels of academia and still get it wrong every time..
