When it comes to investing, time is your most valuable commodity. The Indices have a tendency to trade higher over time. In the last 89 years, the SP500 has been up 73% of the time with an annual gain of 21%. Negative years have occurred 27% of the time averaging an annual loss of -14.29%. This doesn't mean that pullbacks are not painful, stressful, stomach churning, etc. In hindsight, they are a walk in the park, but when you are going through a drawdown, your behavioral flaws will fail you almost everytime. Hence, the importance of knowing the history of the market (SP500).
Another important note is to recognize that individual stocks are not the "market". Most companies fail, “The Russell 3000 index measures the performance of the largest 3000 U.S. companies, 98% of the investable U.S. equity market. 40% of the stocks had a negative return over their lifetime, 20% of stocks lost nearly all of their value, 10% of stocks recorded huge wins over 500%. 80% of the gains are a function of 20% of the stocks. --The Ivy Portfolio
Friday, September 18, 2015
During Stressful Times Keep Your Eye On The Prize
"Frank began his career on Wall Street nearly two decades ago. He worked alongside some of the most respected traders on the street. He quickly realized his true talents were in his ability to interpret market technicals as well as behavior. He was a full-service broker until 2011 when he decided that his no-nonsense approach and expertise was better suited as an independent rather than under the reins of the brokerage business. Since his transition, Frank founded Zor Capital LLC and had successfully managed the portfolios of high net worth individuals. Outside of the cliche cookie cutter approach. His achievements and advice have been featured by CNBC, FOX Business, Yahoo Finance, Benzinga, Wall Street Journal, and CNN Money. Frank is widely regarded as an influential trader in the industry."