T2W Bot

Staff member
1,454 55
One of the biggest differences between individual investors and professional portfolio managers is how they view performance. Individual Investors tend to overvalue short-term performance, placing too much emphasis on one, three and five-year returns. Professional portfolio managers place most of their analysis on seven to 10-year periods, since they coincide with a full market cycle. This is a marked difference and it can greatly change long-term results. To view how significant the differences can be, let’s take a look at 20 years of past performance.
Short-Term Performance
We will start by looking at the diversification chart below, which shows how various asset classes have performed. (The S&P 500 is represented by the category large growth stocks). Notice that over the short-term, during 1995-1999, the large growth stocks category grew approximately 38%, 23%, 36%, 42% and 29% per year. Monetarily, if you had invested $100,000 in 1995, by the end of 1999 you would have...
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profit838

Junior member
15 1
Because investors are usually people with big money. Money must work and make a profit. Long-term market trends are clearly visible and easily projected to make money easier. Investor capital is subject to less risk.
 
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NVP

Legendary member
36,774 1,880
Because investors are usually people with big money. Money must work and make a profit. Long-term market trends are clearly visible and easily projected to make money easier. Investor capital is subject to less risk.
investors are people with big money ?.........seriously ?
 

tomorton

Legendary member
7,443 1,007
Interesting analysis but starts from a duplicitous perspective.

I have come to a simpler view of investing v's trading. Buying shares with a view to selling them to make a profit from price appreciation is trading, regardless of the time horizon. The industry likes to call it investing because it flatters their customers and gives them an air of professional respectability. In reality, this is trading. I don't care if its a 25-year holding period this is still trading. Buy-and-hold investment strategies are actually buy-and-hold-and-hope-and-sell trading strategies.

The only true stock market investment is one that will appear in your Will. So you buy shares for dividend income and pass them on to your children/beneficiaries, who do likewise and pass them on to theirs.

I don't think this view would be popular with the suits - where would they get their commission?
 

new_trader

Legendary member
6,231 1,282
I don't think this view would be popular with the suits - where would they get their commission?
The mainstream media and 'the powers that be' seem to be perpetually bullish on stocks. They never want the public to sell as they always need suckers to offload their portfolios onto when the time is right. I'd say they agree with your view i.e. Hold until you die.
 

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