I read a bit about this effect in "Riding the Bear" which was a decent book. He did a number of studies, blah blah, and found that if you skipped the summer months you would make more dough. I tend to doubt the whole effect. You still have pros who trade year round.
or they just hold.. and hold... and hold.. Skip trading all together and do the classic "buy-and-hold" Bank on the returns MANY years from now, and don't care about Seasonal trading dysfunctions! :D
mooooooo the sheep sell in the Summer. 8O
Stocks are inching higher towards the close today! :roll:
Stocks have to go up sometime. ALthough you can make some dough on daily fluctuations if you trade daily..
If you trade daily and REALLY know what you're doing, then you could definitely make money on daily volatility. When you read any of William O'Neil's (founder of IBD) stuff, he recommends an 8% stop loss order on any stock you own. I hate to tell him, but in the last few years this advice would provde disastrous. It's not that uncommon to see a stock go down that much in ONE day for NO reason!
I'm making money anyway. I only hold stocks for two or three weeks for the most part.
[quote:6e35a85c5a="TheAssistantRandy"]mooooooo the sheep sell in the Summer. 8O[/quote:6e35a85c5a] Um, sheep go "baaaaaaaaa" not mooooooo :P
[quote:8e98c5d650="bobjitsu"][quote:8e98c5d650="TheAssistantRandy"]mooooooo the sheep sell in the Summer. 8O[/quote:8e98c5d650] Um, sheep go "baaaaaaaaa" not mooooooo :P[/quote:8e98c5d650] lol. indeed they do :) :lol
What is best to hold onn to the stock, when it looks good, or go seasonal? Thanks.
A hybrid of both techniques is probably the best way to go. Remember you have to pay taxes on any profits you make if they were held less than one year. This can get expensive! But sometimes the profit you make off of a well executed trade is a pretty good feeling.. Maybe set up an account to do trading in and out of.. Datek is pretty nice. And set up a longer term account just to invest.. Sharebuilder is based on that principal.. long term holdings. Depending on what you are able to contribute have both working in your favor.. see which one you prefer, and you feel most comfortable with..
I think in the last few years more and more people have become "hybrid investors" using multiple techniques because the landscape has become some volatile. "Buy and Hold" has taken a huge hit because of shenanigans of Enron, WorldCom, etc al. People are probably more likely to dump a stock at the first sign of trouble.
Thanks for the information.