I read an article “The Long-Term Investing Myth”; you can find it and read it also, in below link:
https://realinvestmentadvice.com/the-long-term-investing-myth/
The article tries to degrade the value of long term investing.
Well, no, it’s not a myth. One graph answer, speaks a thousand words.
And we can discuss it further…
The article that claims long term investing, is a myth, suffers in three (3) important points:
I mention them right ahead…
The Three Suffering points:
#1: Suppose someone bought at major peaks,
#2: Was absolute passive,
#3: Was 100% invested
And I explain:
• Nobody said that the absolute passive investing is the best investing practice, although that long term, even absolute passive investing outperforms the big majority of Pros.
• Nobody said that you must not take some action, when you see that the environment tends to be ugly. In other words, if the economy tends to insert in recession mode, even mor in depression, it is wise to sell your stocks and get out of the market. Furthermore, if there are strong bears, you can short the market and win from market’s decline. But those shorting actions, must be really short term. But you can also profit from market’s plunges.
• Nobody said that you must be 100% invested. You must be, even in the good times, invested as much as 90%. If you suspect that the environment gets ugly, you must have reduce A LOT your market thesis, maybe you must have exit market (depends on the conditions) and have cash, ready to buy in a strong market plunge. So even if you haven’t exit market and you have only reduce your stocks percentage in your portfolio, you can reduce the average cost, something that will help to profit successfully long term.
So passive long term investing is a good option. But little active investing is better, actually the best. And with “little active investing”, I mean little transactions over time, low commissions, and you can do it by yourselves; no needing Pros.
I explain all these, in my book HERETIC INVESTOR. You can find on amazon.com, here.
Believe me, is a book that will make you, a successful investor. And you will need no one else but yourself, for to be successful.
P/S: If you buy and read my book, please write a review on amazon. Thanks!
Panayotis Sofianopoulos
