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While Rome Burns

Discussion in 'General Investing Discussion' started by Tropo, 22nd Feb, 2009.

  1. Tropo

    Tropo Well-Known Member

    17th Aug, 2005
    While Rome Burns

    ,,,,,But how long is the "long run"? Investors have been bombarded for years with the nostrum that one should invest for the "long run." This has indoctrinated investors into thinking they could ignore the realities of stock market investing because of the "certain" expectation of ultimate gains.
    This faulty line of reasoning has spawned a number of pithy principles, including: "No pain, no gain," "You can't participate in the profits if you are not in the game," and my personal favorite, "It's not a loss until you take it."
    These and other platitudes are often brought up as reasons to leave your money with the current management which has just incurred large losses. Cynically restated: why worry about the swings in your life savings from year to year if you're supposed to be rewarded in the "long run"? But what if history does not repeat itself, or if you don't live long enough for the long run to occur?
    For many, the "long run" is about 20 years. We work hard to accumulate assets during the formative years of our careers, yet the accumulation for the large majority of us seems to become meaningful somewhere after midlife. We seek to have a confident and comfortable nest egg in time for retirement. For many, this will represent roughly a 20-year period......
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  2. Rick

    Rick Well-Known Member

    16th Aug, 2005
    How true! I didn't read the whole thing but I agree with the principle.

    Something long term investors can learn and which I have, is that you have to invest to suit the current market conditions.

    You can't stick to a standard lazy strategy. This is a traders market and if you can't trade effectively you shouldn't be in it. Eventually there will be a buy and hold market again.

    How many "experts" have been saying - hang on to your stocks, and there are abundant bargains available for the last 18 months while the market continually falls?

    I'm hoping to be able to become educated enough to turn my situation around but is no easy task. If I can get through the rest of this bear market I'll be happy and I should be well armed for the next one. :)
  3. AsxBroker

    AsxBroker Well-Known Member

    8th Sep, 2007
    Sydney, NSW
    Hi Rick,

    I found A Random Walk Down Wallstreet by Burton Malkiel very enlightening. I encourage everyone to read it.


  4. Chris C

    Chris C Well-Known Member

    2nd Apr, 2008
    Brisbane, QLD
    Don't worry there is more than enough time to skill up and exploit this bear market! It's not going anywhere in the short term.


    There is no such thing as easy money over the long run, but the ignorant will always believe there is, just like they believe religion is more about divinity than marketing.