Market Timing Is Not the Answer

                  

Stock in-and-out traders always feel they can get out of stocks at highs and in at lows because of their gut feelings or expertise.

                   

There are many reasons why they’re wrong and statistics attest to them. One example is how companies who buy back their own stock in the open market generally do a poor job at the procedure, buying at highs. And they have the benefit of genuine, legal inside information. (See the Earl J. Weinreb NewsHole® comments.)

Prospects For Common Stocks

                      

This is a follow-up to my previous report on the bleak common stock future.

                       

There is a possible solution to the quandary of a poor long-term common stock market. It concerns the use of the corporate bond market and proper implementation of duration, to suit the investor’s personal horizon.

                       

But be sure you invest in a low-cost bond mutual fund where interest earned is automatically, fully reinvested in shares of the same fund.

Despite erroneous conceptions: Corporate bonds can help overcome inflation and the dearth of income and potentially limited growth from stocks. Estimated earnings can well be at least 6% on a net, net, net basis, if strategy is wisely used. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

           

Common Stock Investing Prospects

                      

There are major disconnects among investors about what they expect to earn from their securities portfolio over the next ten, twenty and more years, after tax and inflation.

                       

Admittedly, that’s a tough prediction because investors must take income taxes and inflation into account, along with projected securities’ yield and market returns. That isn’t simple.

                       

In one survey, the net/net/net predicted return by a number of experts over the next fifty years, estimated returns ranged only between 2% and 3% annually.

                                           

That is shocking. Investors’ experience from the past would have had expectations to be close to about 6%.

                       

In fact, many securities markets observers believe that potential, along with taxation and inflation bites, will badly impair future market returns. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Picking Stocks as if Your Real Business

                       

I have found and investigated over 1,600 investment strategies. There are many an investor can use, in which he can imagine they would be his own business.

                       

The investor can take the same attitude as any owner would. The strategy can revolve around what he wants the company to accomplish. Everyday prices and values never enter business consideration while the business is on a growth path.

                                           

Short-term, quick-buyers and sellers often are trading company names. They really have no clue about the business. Most of the financial reports they see are little more than hearsay and gossip from Wall Street pundits looking over each others’ shoulders.

                       

Always remember, the clunker stock the short-termer is selling is probably considered a diamond-in-the-rough by the buyer. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Stock Market’s Psychology

                                        

Market psychology is always a serious factor that dictates discipline in investors. Most take what profits they see on the way up, and run; no matter what their original strategy or purpose was for buying that security. So the odds of achieving huge winnings are always poor.

                       

And besides, it is almost impossible for an outside observer to properly evaluate management. Analysts who make it their profession cannot evaluate managers wisely from the outside. Why believe the public can?

                       

I have found the odds of this sweepstake are too steep in the long run. I suggest investing in low-cost index funds as your best bet. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Top-Winner Stocks are Rare

                     

It's harder to pick stock winners than you may think from reading financial media. Everyone believes they can, but after all the effort, how many stock winners do folks really find?

                       

You hear about big winners but how many of those are available? How many are recognizable early on? It’s always easy to find those who did, after the fact.

                       

Moreover, when you look at these relatively small numbers of success stories, you find that they had their periods of ups and downs. The profit numbers look excellent only after years of market wear and tear. How many investors had the stomach and discipline to buy those stocks at their lows and hold on to them to their highs?

                       

None of the successful securities had gone up in a straight line. Most hit bad cycles when most of the original holders lost faith, deserted ship and sold.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

                   

Disciplined Strategy Investing

                       

A simple idea lets individuals know how to be better investors.

                       

I have found from experience that the average investor does well by avoiding trading extremes. That’s possible by sticking to a disciplined, favorite strategy and then forgetting daily market prices. 

You don’t need constant

financial news, unless your investment strategy calls for it, Relatively few strategies do. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)