jamey said:
I'm just buy and hold. I have them draw money monthly and I'll add too it a few times a year but I just let them chose where to invest.
Now is as good a time as any to restate my previously discussed thoughts on this thread overall. Apologies in advance, for the post length, and to those who disagree, as this is simply my
opinion.
This is NOT a stock markets thread. It is primarily an "Active Traders" forum, where a lot of good ideas are exchanged, and daily market moves are discussed. The great majority of investors who either hire an advisor, or pick a few indexed funds to invest in are not going to derive a lot of benefit from it - consider it entertainment, first, with some education second, and you'll be fine. The original poster (despite stating this in the original post) has consistently refused to have staff re-title the thread "Active Traders", which I believe is a mistake, especially for novice investors who have been told this is "the way" to invest or accurately represents "Stock Markets". It's doesn't, and it's not. A buy-and-hold investor or an employee funding a 401(k) is every bit as much in the stock market as we active traders posting here.
Most of the
trading strategies noted here are opinions and pseudo-science, and not facts, as sometimes posters may lead you to believe. You should always seek out more information from a variety of sources, do additional study, and assess your own risk tolerance before following advice you see here. Anyone who uses the words "guarantee", slam dunk, no-brainer, or the like should be warned, as there is absolutely no such thing in investing. There is a lot of fact-reporting (earnings report info, insider trading stats, volume analysis, analyst ratings, news clippings, etc.) that is very helpful posted here, and tons of examples of surfacing investments you might want to consider (that you wouldn't have found otherwise). That's what makes it great!
A lot of the posting here revolves around
technical analysis, which in my opinion, is primarily bunk (sorry, folks). I have used the word voodoo before to refer to it on this thread. People can get wrapped up in terminology, strategies, and "disciplines" based on this, instead of considering it in conjunction with other more practical data, and this is wrong, in my opinion. Without some basic analysis of fundamentals, market conditions, or other research, technical analysis alone is akin to studying past roulette spins to predict the next one. I have compared it to a Roman general consulting a seer before battle to study goat entrails to dictate timing of an attack. Look at any true statistical study, and you will find that technical analysis by itself performs no differently than the market on the whole (read about a random walk down Wall Street or efficient markets theory for further more accurate education).
That is not to say technical analysis is without merit. Other than those who place trades solely on the shape or slope of a past chart, there are several reasons why
it can be helpful. One is very practical - - there are a lot of active traders who believe in it and act on it, and therefore, can together influence trade selection and near-term market performance. Kind of a self-fulfilling prophecy. Secondly, technical analysis can lead to traders having an organized approach to entry/exit from positions, and no matter what method is used, it can help avoid turning winners into losers (greed) or limiting losses when a trade doesn't work. There's value there, even if your method is flipping a coin or picking arbitrary stops. Also, paired with at least a modicum of fundamental analysis, it can be helpful in selecting entry or exit points for a position you already want to trade.
Bottom line,
take this thread with a grain of salt, and by all means, ask questions before taking action on something you don't understand. Be aware, though, that this thread is generally best for people who have a lot of investing experience and have a decent understanding of trading mechanics (such as option trading), and is not a place for novices to blindly follow. HAPPY INVESTING TO ALL!