John Kuran points us to a study on Stock Market Extremes and Portfolio Performance.
click for larger graphic
Graphic courtesy Towneley Market Timing Study
While one frequently hears T-Heads mentioning how performance drops if/when investors miss the best periods in the market, one rarely hears mention of missing the worst. I recall Tom Dorsey (of DWA) discussing this some years ago.
Note that same market index performance of 12% per year (discussed prior via Jeremy Siegel) requires a very long duration to assure that level of performance.
Stock Market Extremes and Portfolio Performance
Professor H. Nejat Seyhun, University of Michigan
(commissioned by Towneley Capital Management)
This chart has been used primarily as an excuse for bad investment advice: Source: Marketwatch Why an excuse? It builds in an out for the advice giver: See, you just have to hold onto stocks long enough . . . then you will outperform other asset classes. Now all we need to do is figure…Read More
As long as we are talking magazine covers this morn, I am still waiting for someone (anyone) to find this (previously mentioned here) August 13, 1979 Business Week magazine for me: click for larger graphic Many thanks to Paul for the photo (Does this mean you have one?) http://www.flickr.com/photos/pkedrosky/7265064/
I got my first iPod (a Press loaner from Apple) the first week they came out. It was a transcendant experience, and I pounded the table to nearly everyone I knew that this was a huge winner. It made Apple stock, trading then at a pre-split price of $18, with $13 in cash, absurdly cheap….Read More