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shamapant (78.14)

The Market's New Long Term Mood

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August 04, 2011 – Comments (0)


  So here at fool everyone's a buy and hold. It has always worked and it always will. Of course, I agree-if you pick winner stocks, they will show their true colors whether the market wants them too or not. However, it is interesting that even now the average investor with no time to look at individual stocks for themselves is asked by every investment book in all of barnes and nobles(and quite a few humans) to endorse a buy and hold the market(S&P,NASDAQ,etc.) strategy. While it was true that stocks always yielded in the long run before both market crashes, look at the last 10 years- the S&P, assuming a 2% dividend, would have had a 2.1% annualized return for the last 10 years in a buy and hold strategy. The average investor is getting misleaded by investment books citing information from the 50 years before the 2000's...tell him that a 2.1% annualized return is what he's signing up for and he'l just run to 10 year treasury bonds(whose safety was ironically questioned too).  My question-has the US economy become too 'blue chip'? Is the stock market going to become to a place whereyou either buy the market via market timing or buy individual stocks through thorough research? Its arguable, but I am starting to get the feeling that the US economy has become a set back by the law of large numbers.  Also, would anyone happen to know the name(s) of other countries in the world with the same level of strict  reporting standards as the US has with the SEC?

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