TA is witchcraft.
There are several academic studies that completely debunk the notion that there is any value in TA. FWIW, without insider information, fundamental analysis is not a viable strategy for individual investors either. So whats a poor boy to do?
Buy it all. Invest in low-cost indexes and stop watching financial media.
You active-investors types amuse me. In the face of overwhelming evidence against you, you continue to believe in the myth that index fund returns are 'average' (in fact, they are market returns) and that you can 'beat the market'. Active vs. Passive is a zero-sum game.. do you think you have better information than everyone you are competing against in the market? The EMH (efficient market hypothesis) is very well established as an explanation of how prices in the stock market move.
Don't go bringing up Lynch or Buffet. The question is not "why can they beat the market", it is "why aren't there more guys like them"? The EMH would predict that there would be some number of participants that do 'beat the market' at the expense of others that do not.
How do you reconcile your approach with the long-standing fact that active investors underperform over 90% over long spans of time compared to their passive counterparts. Why would you want to play that game?
Let me refute in advance one more argument (I sense it coming). You may say that some active mutual funds beat the s&p 500 every year. First, that may be true for 1, 3, or 5 years. Certainly not 20. Second, the s&p consists of predominantly large-cap, growth stocks. An active fund that 'beats' the s&p 500 will often hold cash, bonds, even foreign securities. So using the s&p as a comparator is flawed. If you construct an appropriate benchmark to those active funds using low-cost indexes, the active fund still loses. It has to, due to trading costs and excessive turnover.
There are several academic studies that completely debunk the notion that there is any value in TA. FWIW, without insider information, fundamental analysis is not a viable strategy for individual investors either. So whats a poor boy to do?
Buy it all. Invest in low-cost indexes and stop watching financial media.
You active-investors types amuse me. In the face of overwhelming evidence against you, you continue to believe in the myth that index fund returns are 'average' (in fact, they are market returns) and that you can 'beat the market'. Active vs. Passive is a zero-sum game.. do you think you have better information than everyone you are competing against in the market? The EMH (efficient market hypothesis) is very well established as an explanation of how prices in the stock market move.
Don't go bringing up Lynch or Buffet. The question is not "why can they beat the market", it is "why aren't there more guys like them"? The EMH would predict that there would be some number of participants that do 'beat the market' at the expense of others that do not.
How do you reconcile your approach with the long-standing fact that active investors underperform over 90% over long spans of time compared to their passive counterparts. Why would you want to play that game?
Let me refute in advance one more argument (I sense it coming). You may say that some active mutual funds beat the s&p 500 every year. First, that may be true for 1, 3, or 5 years. Certainly not 20. Second, the s&p consists of predominantly large-cap, growth stocks. An active fund that 'beats' the s&p 500 will often hold cash, bonds, even foreign securities. So using the s&p as a comparator is flawed. If you construct an appropriate benchmark to those active funds using low-cost indexes, the active fund still loses. It has to, due to trading costs and excessive turnover.