- Variable Rates of Return from Stocks
- Speculative Bubbles Are Often Followed by Years of Below-Average Investment Performance
- The Moral of the Story—Be a Flexible, Opportunistic Investor
- Growth Targets—"The Magic 20"
- Growth Target Zone
- Active as Opposed to Passive Management of Assets
- Diversification—A Major Key to Successful Investing
- Income Investing—Time Diversification
- Creating a Bond Time Ladder
- Increasing Returns from the Stock Market while Reducing Risk
- Useful Market Mood Indicators That You Can Maintain and Use in Just a Few Minutes Each Week
- Relationships of Price Movements on NASDAQ and the New York Stock Exchange
- How to Identify Periods When NASDAQ Is the Stronger Market Area
- General Suggestions
This chapter is from the book
This chapter is from the book
This chapter is from the book
Increasing Returns from the Stock Market while Reducing Risk
The strategies discussed so far relate only to the structuring of more efficient investment portfolios (and particularly to the benefits of various forms of diversification). We have not, as yet, even considered strategies associated with stock market timing, the attempt at least to make investments at the most appropriate periods in the investment cycle: to buy near market lows or at least relatively early in price up-trends and to sell near market highs or at least relatively early in price downtrends.
Successful market timing, like well-considered diversification, can help you to both increase returns from your investments and to reduce risks associated with buy and hold investments. If you are a typical investor, you are probably better off avoiding short-term trading, which places heavy demands on time, increases investment expenses, and which has become generally more difficult in recent years.