Trading Now

Trading Now

Monday, November 2, 2009

Why Buy and Hold is no Way to Invest

from Dan Weiner, an Independent Vanguard Adviser
“If an investment declines 10%, it takes about an 11% gain to break even (assuming you don’t pump in additional dollars). If the drop is 20%, you need a 25% gain to recover. A fall of one-third requires a rebound of 50%. And if your investment falls by half, “you need a double,” or a 100% return, says Mr. Wiener, the New York-based editor of the Independent Adviser for Vanguard Investors. The recovery percentages grow exponentially because you have so few dollars working for you after a big loss.
*in other words, if you lost 50% in 2008, like most people, then you need to make 100% to break even. Learn to be a trader people. Or put your money in the bank or under your pillow. Expect Wall Street over the next three years to try as hard as they can to rob candy from a baby, just like our politicians have been doing for years. Oh right, they really are one and the same.

No comments:

Post a Comment


Wikinvest Wire