[casinobonusa]

and the P/E of Intel is below 16 now, I start thinking about buying them again

[putza]

Its only a blip they happen all the time. Given enough time it will go back up.

[mr.nemo]

Its only a blip they happen all the time. Given enough time it will go back up.

About 18% drop since November is a blip to you? I'm glad you are not my Stock Broker. People were saying it was just a bit of froth off the markets back in July at it was kind of believable. When you look at the kind of money that has been injected into the markets by central banks and the fact that markets have still tanked you have to look at this as a little more than a blip. If you think about the fact that the monetary injections and todays Fed rate cut are greater than those that took place after 9/11 you get a glance of how serious things are at the moment and the kind of fear in the market right now.

Let's take a look at your argument though, given enough time yes the market will go back up. But lets say I didn't listen to just you but my actual broker who said back in May that it was their opinion that there was another 10% growth in the market for 2007. So I've lost about 18%. Okay well if everything goes rosy and the markets grow at the average rate for the next couple of years I might break even in late 2009 but wait! Inflation is running at almost 5% and the Fed is aggressively cutting interest rates sure to fuel inflation further. So by the end of 2009 I'll really be at least 10% down. Well end of 2010 I've gotten even again but inflation's cutting me down I might not see a profit again until late 2011 early 2012 and that's counting on a 10% return on stocks every year from now on.

[mr.nemo]

and the P/E of Intel is below 16 now, I start thinking about buying them again

Yeah early February might be a good time to buy.

[putza]

“About 18% drop since November is a blip to you? I'm glad you are not my Stock Broker.”
I think in long team and 18% is a blip. It’s not like its going stay low. Speaking generally every so often you get a blip and it always bounces back up over time. You had one in the early 90's, dotcom one, sep 11, few others. Happens all the time.

Thinking more of UK shares as well not US and I normally keep shares long team for 10+ years so yes it’s a blip to me.

[mr.nemo]

Speaking generally every so often you get a blip and it always bounces back up over time. You had one in the early 90's, dotcom one, sep 11, few others. Happens all the time.

Thinking more of UK shares as well not US and I normally keep shares long team for 10+ years so yes it’s a blip to me.

Good job you didn't invest in the 70s then hey? A longer term view of the last 100 years would actually suggest 15 or so years of stock market growth and 15 years of sideways consolidation. Since we had 18 years of growth up to 2000, I'd consider staying in the market for a very long time that being the case.

[putza]

Staying in the market for a very long time isnt a problem for me. Unless something happens I have many years left and a very long time before I retire and need the money. Plenty of opportunity for the stock market to go down and up multiply times. I have assigned my self to the fact I am going lose £1000’s and make £1000’s lots of times before I get around to selling my shares. Any time you invest long team you expect blips to happen.

[n2Oddw8P]

But the real money is in selling before a crash like this happens (and they do happen all 3-5 years) and then buy when all the stocks are down.

[mr.nemo]

Staying in the market for a very long time isnt a problem for me. Unless something happens I have many years left and a very long time before I retire and need the money. Plenty of opportunity for the stock market to go down and up multiply times. I have assigned my self to the fact I am going lose £1000’s and make £1000’s lots of times before I get around to selling my shares. Any time you invest long team you expect blips to happen.

But the real money is in selling before a crash like this happens (and they do happen all 3-5 years) and then buy when all the stocks are down.

Exactly UT this was what I was going to underscore, your approach to trading. Pottsey you said you like the FTSE and consider things like this blips, but again long term the FTSE didn't even manage to break even from it's 2000 high during last years peak and during that time it nosedived 50%! Or a blip as you call it.

In fact the FTSE is looking pretty much flat for 10 years and that's before you even factor in RPI inflation! So you can't really trade a period of market consolidation like this as long term unless you like to lose money. You want to take the approach which UTGeneral does and pick individual stocks that appear undervalued hold them watch those technicals until they look ready and sell for a profit.

[tramadoldiscountes]

You actually can achieve wonderful long term results using a very simple index-mirroring buy and hold strategy if you reinvest your dividends and mechanize the contributions you make to your portfolio. This will take advantage of declines in the market as well as keep you on track to match upwards performance in advancing markets.

There is absolutely nothing wrong with index investing. Historically, it smashes the results from guaranteed investments, bonds, etc., handily beats most mutual funds and typically beats most individual investors' portfolios too.

Beating the market is very difficult, time consuming and demands either luck or true expertise. Matching it is easy, safe and quite rewarding.

There are also lots of really interesting options available to investors now (on US markets anyway) to take their index investing to the "next" level. Sector Select SPDRs, for example, allow investors to pick sector indices at very low cost (average of 0.24%MER or something like that compared to as much as 3% on some mutual funds). If you think the technology sector will outperform, you can buy a technology index. Or energy, or retail, or... You can buy and sell these indices (they're ETF) just like stocks, but instead of one stock you get a basket of companies that exist within a specific industry.

This allows you to add some thought to your portfolio and direct it in the way you see fit, although historically most people would still be better off with a straight-up index investing strategy.