I guess most people worry about the big market crashes thinking that the smaller ones will not hurt. But I think it's a delusion to think that the small ones ( after the fact of course), that they do little to a person's portfolio. Here for instance are the mini crashes that accumulate to disaster. This will show that it is so difficult to beat the market, between these periods of time you would have to over- ride the losses in each crash, and that is most difficult to do. For instance, see item 1 shown here, you would have to make about 30% before you lost 17%. Then you would have to recover between item 1 and item 2. You would have to gain back at least 35% in a fast and short time. Then you would have to again over-ride the -14% in item 2. Again and again, in each instance you would have to gain way over and above the loss in each instance. IOW, it's a difficult game, a very difficult game.
Just Analise this example. I guess you math wizards would be much better at analyzing it than I am of course. But the details should show up more accurately in each instance where you would have to overcome the percentages loss each time each attempt. They say investing in the market is a positive game, but well, I don't know where that conclusion came from. The loss from March 2000 to the end of he bear market was abut 75%. Just some info, and a small example just going back a few years. In each instance even if you could time the market, just one mistake will pretty much wipe you out.
1)..07/14 to 09/10/98 -17.63%
2)..01/07/2000-03/14/2000-14.85%
3)..05/21/2001-09/26/2002-22.15%
4)..03/19/2000-10/09/2000-31.49%
The peak of the Dow was o 01/20/2000. As of today, five years after, 04/16/2005, it is still down about 11%. The NASDAQ is down about 18%. I should take my own advise and quit, but curiosity, killed the cat! :>))
Just Analise this example. I guess you math wizards would be much better at analyzing it than I am of course. But the details should show up more accurately in each instance where you would have to overcome the percentages loss each time each attempt. They say investing in the market is a positive game, but well, I don't know where that conclusion came from. The loss from March 2000 to the end of he bear market was abut 75%. Just some info, and a small example just going back a few years. In each instance even if you could time the market, just one mistake will pretty much wipe you out.
1)..07/14 to 09/10/98 -17.63%
2)..01/07/2000-03/14/2000-14.85%
3)..05/21/2001-09/26/2002-22.15%
4)..03/19/2000-10/09/2000-31.49%
The peak of the Dow was o 01/20/2000. As of today, five years after, 04/16/2005, it is still down about 11%. The NASDAQ is down about 18%. I should take my own advise and quit, but curiosity, killed the cat! :>))
