Index funds and Index ETF

[offroad]

Hello,

First post. I have a 457K retirement plan that lets me choose what funds I can invest in. Anything from a stock indexed fund, to a bond indexed fund, to a government securities fund. Also subscribe to a indicator-direction TOOL that predicts what the next week is going to be like with the markets (costs $15 per month).

So if the TOOL says to put funs into the stick index, I do that day, and the trade happens that day some time. Have two changes (sort of trades) that can happen per month. Cost $0 per movement.

If I just let it ride in any of the ten different accounts I can put funds into, I would get maybe 5% to 10% per year if lucky. But if I follow the TOOL advice I can get 20% to 30%. Well it is working, and I am getting this level of return.

Trouble is I do not believe the TOOL will be there forever. Does anyone else have any self created or subscribed tool like the TOOL I am using, for prediction of the next week?

 

[utrecht]

This thread is going to end badly.

 

[pb4uski]

Amen. What a TOOL.

 

[offroad]

so in general thats just wishful magic thinking, that no one does that good. And its crazy talk to think that way.

Its okay to say that this is crazy talk folks, just be nice about it.

Am not talking about beating the markets. Am talking about matching the markets, and just jumping to a better performing market at the right time.

Stock index looking good then stay, Bond index looking good then go there. Everyone on a down trend then get the to government securities and wait.

Why buy and hold? Or is the general thought that day trading, over a weeks time, or a months time; is still day trading and wishful stressful thinking.

 

[MichaelB]

Welcome to the forum, offroad. Why not stop by here and tell us a little about yourself.

 

[pb4uski]

Let me put if this way, offroad. If you had some sort of secret sauce that could reliably and consistently generate 20-30% returns without much risk, would you bother publishing a newsletter?

You're talking about trend investing. See https://www.efficient.com/pdfs/A_Century_of_Evidence_on_Trend-Following_Investing.pdf

Trend-following investing has performed well consistently over
more than a century, as far back as we can get reliable return
data for several markets. Our analysis provides signifi cant out-ofsample
evidence beyond the substantial evidence already in the
literature (Moskowitz, Ooi, and Pedersen, 2012). This consistent
long-term evidence indicates that trends are pervasive features of
global markets.

Markets have tended to trend more often than not because of
investor behavioral biases, market frictions, hedging pressures,
and market interventions by central banks and governments.
Such market interventions and hedging programs are still
prevalent, and investors are likely to continue to suffer from the
same behavioral biases that have infl uenced price behavior over
the past century, setting the stage for trend-following investing
going forward.

Despite a century of very strong performance of trend-following
investing and the continued presence of biases and interventions,
the strategy’s expected return going forward may nevertheless
be hurt by several factors: increased assets under management
in the strategy, high fees, and higher correlations across markets.
However, the returns to investing in the strategy can be improved
if asset managers offer lower fees, invest in trading infrastructure
and strategy implementation that reduce transaction costs, and
obtain broader diversifi cation by expanding the set of tradable
futures and forward contracts. The diversification benefits of the
strategy remain strong and we think offer a compelling case for a
modest allocation in an investor’s portfolio.

 

[offroad]

Welcome to the forum, offroad. Why not stop by here and tell us a little about yourself.

just did.

 

[aja8888]

Hello,

Does anyone else have any self created or subscribed tool like the TOOL I am using, for prediction of the next week?

I use this tool:

 

[offroad]

Pb4 - thanks.


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[tulak]

Am not talking about beating the markets. Am talking about matching the markets, and just jumping to a better performing market at the right time.

So you never sell a fund (market) to buy a new fund (market) that the TOOL recommends?

In that case, it sounds like a form of value averaging, even though who knows how the TOOL determines which fund to buy. If this is what you're doing, then you're probably better off spending the $15/month on a growler and picking the fund (market) that has been underperforming over the last couple of weeks.

Why buy and hold? Or is the general thought that day trading, over a weeks time, or a months time; is still day trading and wishful stressful thinking.

Because it works. Day trading is a bad way to build wealth (IMO).

 

[youbet]

Because it works. Day trading is a bad way to build wealth (IMO).

There is a lot of distance between "day trading" and "buy and hold." Those certainly aren't the only alternatives!

 

[pb4uski]

....Day trading is a bad way to build wealth (IMO).

I would flip it around and say that IMO day trading is a great way to destroy wealth.

 

[MRG]

I used a tool, first thing that got me investing. Well it got me interested so that was good. There's a bunch of those things available free or subscription models. Some are doing their best to upsell training, a guy I knew spent 20k on options training. He plays 1 put or call a month.
Everyone eventually figures out there's really nothing the tool does, it's just hype. The information the tools use is also available online for free. Google free stock charts or go to M*.
Friends of mine all had the same experience, and today we all invest. Some fun play money but trading has plenty of risk. Best wishes, hope you hang around and learn.

 

[tulak]

There is a lot of distance between "day trading" and "buy and hold." Those certainly aren't the only alternatives!

OP mentioned only day trading and buy and hold, hence my response. I fully agree that there are alternatives.

I would flip it around and say that IMO day trading is a great way to destroy wealth.

My answer was intentionally conservative. Who knows, maybe TOOL figured out how to successfully day trade?

I agree with you though, day trading is a great way to lose money. But I didn't want to go there, even though it looks like I just did.

 

[petershk]

Yes I suspect there will be a great deal of skepticism. The number of technical traders on the richest people list isn't very big which kind of tells me what I need to know. Wouldn't take long to be a billionaire at 30% returns starting with almost any amount of money.

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[karluk]

Wouldn't take long to be a billionaire at 30% returns starting with almost any amount of money.

You are either overestimating the power of compounding or underestimating just how big a number $1 billion is. Even a relatively poor person should be able to save $1,000 in seed money. But according to my calculations, it would take 52 years, 8 months to become a billionaire at 30% annual growth.

Many on this board could come up with $1 million, but in many cases that's after decades of saving and investing. If you started with $1 million in seed money, it would still take 26 years, 4 months to become a billionaire.

It appears that the math works out to it taking 26 years, 4 months to grow an investment by a factor of 1,000. That's an impressive rate of growth, but unfortunately $1 billion is so much larger than what most people have available to invest that it still takes many decades of 30% growth to become a billionaire.

On the other hand, a young person with $1 million to invest could subscribe to this TOOL service and confidently look forward to becoming the world's first trillionaire in under 53 years.

 

[Totoro]

It appears that the math works out to it taking 26 years, 4 months to grow an investment by a factor of 1,000. That's an impressive rate of growth, but unfortunately $1 billion is so much larger than what most people have available to invest that it still takes many decades of 30% growth to become a billionaire.

Be a bit more creative

Start with 50k, have 30% returns for five years. Build up a formal track record.

Raise 3 million in funds from friends, family and relatives. Charge 2% management fee and 20% performance fee.

As you accumulate assets under management, gradually return money to investors.

Should be done within 15 years or so. Ask Buffett

 

[MRG]

Offroad is the tool from INVESTools? If so you might want to google the name with complaints/rippoff after it. They have quite a history.

 

[photoguy]

Should be done within 15 years or so. Ask Buffett

Don't you mean madoff



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[offroad]

Offroad is the tool from INVESTools? If so you might want to google the name with complaints/rippoff after it. They have quite a history.

No not them.


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