Jubilee Prosperity

Then, after jumping off and hiding as an act of self-preservation, she misses the 66% recovery.

After a 50% loss, a 66% recovery, because of mathematics, does not get back to even, where every loser wants to get, often leading to plunging more.

(When a market falls 50%, it has to recover 100% to break even.)

66% buy and hold is at least better then selling at the point of maximum pessimism.

How did we know to buy and post our total return value buys in Charts with Hearts on stockcharts.com last March 2009?

We bought values with income at the point of maximum pessimism.

Many people with retirement accounts decided in the last two years to cash in what was left of their life savings, for what they hoped was safer bonds or currency. Maybe.

Bonds and currencies have their own risks of default and inflation.

Both can raise interest rates and drop prices.

Invariably, when people act out of fear, they end up liquidating near the bottom, jumping out of the frying pan into the fire. They capitulate and sell out when they could be buying low to profit if they had the confidence, conviction or courage.

Conversely, people influenced by headlines may end up buying in excitement or greed at the top of the market, only to repent later as prices decline.

One thing people might always ask themselves is:

Exactly what is free or cheap advice worth?

We long shared here the idea that dollar-cost averaging a top quality growth and dividend holding like Exxon Mobil, the largest company in the world, AAA credit, that provides an essential product in good times and bad with economy of scale, can outperform most who try to time the market or cherry pick winners in their spare or even full time.

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This entry was posted on Monday, February 22nd, 2010 at 7:58 pm and is filed under Prosperity. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.