Timeline for What does the term "match the market" mean?
Current License: CC BY-SA 3.0
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| Apr 6, 2013 at 13:02 | comment | added | ChrisInEdmonton | Stop-loss is certainly a good idea, but you expose yourself to additional costs (the cost of the stop-loss execution) and risks (if the stock goes down 16% then immediately rebounds, you'd have been better off not selling). Just pointing out that it's no free lunch, NOT claiming that stop-loss is a bad idea. | |
| Apr 6, 2013 at 3:46 | comment | added | Victor | That is exactly what stop losses help you do. I usually have my trailing stops set at 15% below the last high close, however on the 20 Mar 2013 I could see some divergence appearing in the ASX200 and thus tightened my stops to 5%. I have since been stopped out of all my positions except one (which has continued to go up). I was up 27% and am now up 24.5%, so have kept most of my gains, at a time when the ASX200 has continued to fall. I'll wait until I see signals in the ASX200 chart that the trend is changing again before I get back in. That's the benefit of having a risk management strategy. | |
| Apr 5, 2013 at 22:03 | comment | added | JTP - Apologise to Monica♦ | And if you can avoid those down turns but be back for the upswings, you would beat the market and that would be rare. When our S&P peaked over 1400 and a year later was below 700, I wonder how many go out and got in at a lower level? Because cash flows were still negative from the small investor well after the bottom. | |
| Apr 5, 2013 at 21:20 | comment | added | Victor | How about when the market is going down by 10%, 20%, 30% or more in a year, I could easily beat the market simply by being out of the market. | |
| Apr 5, 2013 at 13:22 | history | answered | JTP - Apologise to Monica♦ | CC BY-SA 3.0 |