{"id":14731,"date":"2024-04-17T23:43:32","date_gmt":"2024-04-17T23:43:32","guid":{"rendered":"http:\/\/goldstocksforex.com\/?page_id=14731"},"modified":"2024-04-18T05:13:25","modified_gmt":"2024-04-18T05:13:25","slug":"time-frames-hare-or-tortoise","status":"publish","type":"page","link":"https:\/\/thepatientinvestor.com\/index.php\/time-frames-hare-or-tortoise\/","title":{"rendered":"Time frames: Hare or tortoise?"},"content":{"rendered":"

When you buy a stock, think of it as buying a share in a business. You are now the proud part-owner of a business enterprise. You may have a portfolio of such investments, but that shouldn’t alter your approach. Treat each as a long-term investment.<\/p>\n

If you own a gold stock, you are part-owner of a gold mine and should look forward to a strong gold price, especially if it is a marginal mine, rising production, and effective management of costs. If you own a share in Microsoft you would hope for increased market share as well as effective cost management.<\/p>\n

Occasionally you may have to sell a stock because something has negatively affected the long-term prospects of the business, or because you receive a crazy offer that is way above its perceived value. But these should be exceptions rather than the general rule.<\/p>\n

There are 3 keys to successful investment:<\/p>\n

    \n
  1. Timing of your investment;<\/li>\n
  2. Length of time you hold the investment;<\/li>\n
  3. Timing of the sale.<\/li>\n<\/ol>\n

    Many investment advisers follow the adage: “It’s not timing the market that is important; it’s time in the market.” <\/p>\n

    While I agree that time in the market is important, try telling someone who invested in stocks in 2000, or 2007, that timing isn’t important. It can take up to a decade or more to restore value lost through poor market timing. So don’t tell me that it’s not important. <\/p>\n

    The green and red arrows below identify the start of bull and bear markets on the Dow Jones Industrial Average, in accordance with Dow Theory.<\/p>\n

    \"Dow<\/p>\n

    Similarly, investors who sold their stock portfolio in 2002\/2003 or 2008\/2009 are unlikely to be happy with their performance.<\/p>\n

    At the same time, if you continually buy and sell stocks on a daily basis, you are unlikely to have much success. There are exceptions, but they are a few compared to the many. Short-term stock movements are largely random and it is difficult to find a consistent edge. On top of that, you have transaction costs that continually erode your capital.<\/p>\n

    Whether you are part-owner in a business or in real estate, you are unlikely to show much profit if you continually buy and sell your investments. In the words of a valued former client: “You need to let time do its work.”<\/p>\n

    The longer your time frame, there are two factors that work in your favor: lower transaction costs and less random market behavior. The longer the time frame, the easier it is to predict stock market direction. <\/p>\n

    Brokers Charles Schwab once did a survey of their clients to establish whether there was a particular time frame or investment strategy that yielded the best results. They found one category of client that outperformed all the others: those who had forgotten they had an account with Charles Schwab. The less activity there was on an account, the better it was likely to perform.<\/p>\n","protected":false},"excerpt":{"rendered":"

    When you buy a stock, think of it as buying a share in a business. You are now the proud part-owner of a business enterprise. You may have a portfolio of such investments, but that shouldn’t alter your approach. Treat each as a long-term investment. If you own a gold stock, you are part-owner of … <\/p>\n

    Continue reading “Time frames: Hare or tortoise?”<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_mo_disable_npp":"","footnotes":""},"class_list":["post-14731","page","type-page","status-publish","hentry"],"yoast_head":"\nTime frames: Hare or tortoise? - the patient investor<\/title>\n<meta name=\"description\" content=\"When you buy a stock, think of it as buying a share in a business. You are now the proud part-owner of a business enterprise. You may have a portfolio of such investments, but that shouldn't alter your approach. 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