11–20 of 36 posts
> The question then is: What do you do with your cash when it’s not invested in the stock market? Assuming we put them in high caliber (“risk-free”) interest bearing fixed income instrument they would still give us a return on our investment while we’re out of the stock market. Based on data from various historical sources I’ll stick with an average annual geometric risk-free rate of 5%. I must be misunderstanding th…
Shouldn't he test his model on another dataset besides the one used to generate it? Maybe it's overfitted. It would have been nicer to see the whole thing developed with only a decade or two of data, then shown to work for all the other decades too.
> The question then is: What do you do with your cash when it’s not invested in the stock market? Assuming we put them in high caliber (“risk-free”) interest bearing fixed income instrument they would still give us a return on our investment while we’re out of the stock market. Based on data from various historical sources I’ll stick with an average annual geometric risk-free rate of 5%. I must be misunderstanding th…
This analysis is only looking at the price of the S&P 500, not the total return. An investor that sits out half of the year will miss out on about half of the dividends paid, which are always positive. EDIT: Here is a graph highlighting how important including dividends is: https://i.imgur.com/YZSq6K3.png Another consideration is taxes. The short-term gains produced by selling after 6 months are taxed at normal incom…
This analysis is only looking at the price of the S&P 500, not the total return. An investor that sits out half of the year will miss out on about half of the dividends paid, which are always positive. EDIT: Here is a graph highlighting how important including dividends is: https://i.imgur.com/YZSq6K3.png Another consideration is taxes. The short-term gains produced by selling after 6 months are taxed at normal incom…
Aren't dividends figured in to the historical prices anyway, though? Via adjusted closing prices?
Of course, what actually happened is I managed to miss a 15% bump in IJT, a 5% bump in VT, a 6% bump in IYY, and about flat in GLD. The two stocks I held directly however did go down about 10% since selling.
So yeah, the two most basic pieces of advice; you can't time the market, and don't hold individual stocks (without spending the time to actively manage your portfolio), both rang quite true for me at least the last 6 months. I just haven't gotten back in, because I'm sure the day I decide to do that will prove to be the actual peak. :-/
OCTOBER: This is one of the peculiarly dangerous
months to speculate in stocks in. The other are
July, January, September, April, November, May,
March, June, December, August, and February.
