| |
| |
|
|
|
|
|
|
Realistic Investing Expectations
Over the long term stocks have provided us with great average return results. But this average return masks a great deal of volatility, because returns have fluctuated within a very wide band. This extreme volatility is the chief risk of investing in stocks, but it is a risk that tends to recede from investors' memories after a lengthy period of generally rising stock prices. Those investors new to investing in stocks may underestimate the volatility of stocks because volatility has been muted in recent years. Time greatly reduces, but certainly does not eliminate the volatility in returns from stocks. On the other hand, there is no guarantee that you will earn above average returns even if you hold stocks for two decades or more. Investors who are relatively new to investing in stocks may benefit from some perspective about bear markets. During the bear markets, Indexes declined an average of 25-35%. Although the average bear market lasted a little longer than 12 months, it took an average of almost 20 months for the Indexes to return to the levels achieved before the market downturns. Although no one can reliably predict the timing of bear markets (or bull markets, for that matter), a prudent investor should understand the extent to which stock prices can decline and should be prepared to "ride out" these periods when they occur. The big danger from bear markets is that investors will sell at or near the bottom of the downturn. Those who got out of stocks missed an extraordinary rebound in stock market performance. Since risk is inescapable when investing in stocks, perhaps the greatest risk is that you will never invest in stocks because you can never be sure when is "the right time" to invest. Uncertainty is a permanent feature of the investing landscape, and trying to discern the ideal time to invest is almost always a futile exercise. Don't be swayed by market fluctuations or the opinions and predictions from market analysts and forecasters! Your investment strategy and expectations should all be based on your personal objectives, time horizon, risk tolerance and financial situation. It should not be determined by the direction of the financial markets or the opinions of "The Experts!" Copyright © 2005 I.E.C. Haramis haramis@greekshares.com http://www.greekshares.com Ioannis - Evangelos C. Haramis was born in Greece in 1951 and he studied in Greece, USA and in Belgium. He has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank and editor of http://www.greekshares.com
MORE RESOURCES:
Investing - Google News |
|
|
|
RELATED ARTICLES
Wit and Wisdom on Money, Wall Street and Success - Part #2 Here are ten more WISDOM packed GEMS that ooffer very unqiue insights to the world of trading and investing.These quotes promote a philosophy which is readily understandable and sometimes hysterical. The Switzerland of Asia Shines In many respects, Singapore is the Switzerland of Asia.Begun in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister's father, Mr. Investors: Avoid These 5 Common Tax Mistakes For many investors, and even some tax professionals, sorting through the complex IRS rules on investment taxes can be a nightmare. Pitfalls abound, and the penalties for even simple mistakes can be severe. Selecting Rules for Investing and Trading There are three important differences between investing and trading. Overlooking them can lead to confusion. Remembering TEOTWAWKI and Learning from It Its only been about 5 years since we had major scares in the marketplace regarding Y2K. You might recall that many computer systems were not programmed to be able to understand the change from 1999 to 2000. Angels Investors and Their Networks What is an Angel Investor? An Angel is usually a private person who invests in small businesses. The Angel is generally a successful businessperson or entrepreneur who looks to invest in a business that has potential for growing their investment in the future. Can Your Annuity Do This? Okay, so I can tell you I have sat in front of countless numbers of people who have made mistakes when purchasing and owning annuities. And I have visited people who wish they never got involved in an annuity. Get Wealthy With the Rule of 72 When it comes time to retire how many people would like to have a nest egg that is 2 or 3 or even 4 times larger than what they have? With an answer so obvious allow me to explain how you can make it happen for yourself.First we'll explain the Rule of 72. Four Key Components To Building A Trading System Need some insight on what you should really be striving for when you're building a mechanical trading system? When it comes down to it, there are really only a few criteria that are used in judging the merits of a trading system. The most obvious one is profitability - does the system work? But really, there's more to it than just that. The Power of Small Numbers: Trading Success is Based on Consistency, Not Home Runs Online trading is so seductive - just sit, click, and rake in the profits! But as anyone who has ever seriously attempted online trading will probably tell you, it's just not as easy as it sounds.Many beginning traders are seduced by the lure of the "home run", that big trade that makes you an instant millionaire and retires you overnight to your own private island paradise. Mutual Fund Returns May Not Be As They Seem! Arthur Levitt, during his tenure at the SEC, experienced many cases where the non-indexed mutual fund manager bought shares for their own accounts before the fund bought the shares. The fund's purchases drove up the price of the stocks and the fund manager's made a killing on the deal. When Its Too Late to Save for Retirement You are 55 years old (or somewhere around there) and your company is going to force you to retire at 65. You have $35,000 saved in your 401K and that's all. Just Say NO to Your Stock Broker We have all heard that slogan that started back when Nancy Reagan was in Washington. It was all about drugs. Bankers in Denial Denial is a ubiquitous psychological defense mechanism. It involves the repression of bad news, unpleasant information, and anxiety-inducing experiences. Maniac Investment Let's first understand what maniac means. According to Webster a maniac is "mad; raging with madness; raging with disordered intellect". An Introduction to Offshore Investing Once upon a time, offshore investment strategies were spoken of in hushed tones. They were conversations restricted to the plush offices of private Swiss bankers, or a dinner table topic in the expensive playgrounds of the multi-millionaires. How to Use Annual Report There are many steps in calculating the fair value of a company. However, before we even do that, it is imperative to know how a company earns its profit. Is Offshore Banking for You? You've probably heard about people who keep their money offshore. Most likely you assume they're all wealthy businessmen; millionaires, who have so much money they somehow 'qualify' to move it out of the country, right? Wrong! Offshore banking can be a benefit for anybody regardless of income. Top Ten Investment Mistakes 1. Lacking an investment plan a/k/a/ "Don't take a trip without packing the map". Lessons in Transition Q: What have been the most successful approaches to attracting direct foreign investments: offering prospective investors tax breaks and similar benefits, or improving the overall investment climate of the country?Empirical research has demonstrated that investors are not lured by tax breaks and monetary or fiscal investment incentives. They will take advantage of existing schemes (and ask for more, pitting one country against another).
|
| home | site map |
| © BullMarketData.com 2008 |
