FYI: The past two months have been challenging for stock market investors. The S&P 500 quickly tumbled 9.8% from its Sept. 19 all-time high of 2,019 to as low as 1,820 on Oct. 15.
Because of the way our brains work, most of us worried about the possibility that this correction was turning into an outright market crash. Our instinct was to dump stocks. Surely, many investors sold and told themselves they would "wait out the volatility" on the sidelines. A confident few likely even shorted the market.
However, history shows this is the most classic mistake investors make. So, kudos to those who held on to their long positions.
Regards,
Ted
http://www.businessinsider.com/investors-miss-stock-market-rallies-charts-2014-10#ixzz3HkFGcDuZ
Comments
Own what you own for a well-defined reason with a view longer than a week, have some belief in the long-term theme behind why you bought it in the first place. You're never going to change human psychology en masse, but if you can change a fair amount of people and educate them, a difference could likely be made.
I guess my thinking is that periods like the one in mid October are actually a good test from the standpoint of if you see markets down 300-400, you can quickly tell what you really have a strong belief in and what you don't.
But it might have had more to do with my decision to buy into the NR/commodity areas when they were falling. Actually, despite the hysterical media coverage, the two funds (QRAAX & PRNEX) have held up pretty well over the past 3 or 4 weeks since I bought in - although both are showing big losses YTD. PRNEX was actually up .90% yesterday - far better than anything else that I own or track. I view both as long term hedges against a frothy equity market. So if the 2 funds do reasonably well over the next 3-5 years, I don't particularly care about shorter term performance.
Nice bounce for gold today. Up $28 last check. Energy sector showing strength in recent days - especially nat gas and heating oil due to some pretty extreme weather. Recall seeing 37 and snow flurries in Atlanta few days back.
Apologies to Ol Skeet. My spellchecker preferred Ol Skirt - I've now corrected it.
Same here. Lookin' good!
Hi there. You just mentioned something which has been bugging me since the "downdraft". How many articles have we all read bewailing the fact that we fail to "buy low/sell high"? Maybe six million?
Yet every time that I'm inclined to buy during a down cycle MFO seems to be flooded with the "falling knives" routine. Let's see now... don't buy when things are going down because of falling knives, and don't buy when things are high because they may go down... when the hell are we supposed to be buying?
As you allude, there's a universe of investing cliches - many seemingly opposed. I think that's why it's important to develop a approach that's comfortable for the individual. And yes - I distinctly recall your adding some on the 9.9% downdraft.
Been there & done that. Totally crummy! Go to the bar, have a drink or two. Expensive at airports, but what the hell...
So, are you two runn'in away from the cold weather???
Appears there is gonna be some big waves moving across Lake Michigan in the next few days.
Catch
Another odd weather pattern shaping up for the season I'm afraid. Seems like we just put the snowblower away & time to start all over again.
Hey OJ, behave yourself.
Lots of Michigan folks in that state, too, eh?
Okay, away for a fundraiser to support the local high school band.
Take care,
Catch
Regards,
Ted
In answer to your question ... Why SGGDX?
For starters ... Here are three.
1) It is about 80% invested in the miners and about 20% the metal. In reviewing rono's comments I took that rono's outlook was the nearterm better action would be in the miners more so than the metal. For sure, rono knows more about the metals than I do and has over the years posted his thinking. His thinking seems to right more times than not.
2) This is a M* five star rated fund and one I have watched over the years and just yesterday put it back on my watch list after reviewing and studying other funds in this category. Centeral Fund of Canada (CEF) is another good fund that I have own in the past. I still might buy some of it too and let SGGDX be my play on the miners and let CEF be my play on the metals (gold & silver).
3) I felt that the metals and miners are/were presently very oversold and it seems I was right as over the past two days alone this fund is up about 8%. Wish I'd got to it last week.
It will be interesting to see where this goes next week as it seems others might have been thinking along these lines too.
Old_Skeet
OJ
Regards,
Ted
Music Man: Robert Preston: