"ok so there are about 900 days in that 3 years, if you miss ten of those days you will lose half your return
basically, the odds of getting those 10 days are about 1 in a 100"
philosophically exactly correct -------- for those people who are sitting out of the market at present in either fear or waiting for what they think is opportunity - then if they get the timing right, all is well - but they should realise that they are taking the biggest risk of all.
Personally, my philosophy is this - to ALWAYS have a solid investment in high return solid recession proof or near recession proof industries - they do exist, although there are not many good ones. But also to have a solid cash backup - waiting for our monotonously regular crises -------- BUT here is the key - when you get the big dippers ----- you MUST deploy that cash. You MUST have well researched targets ready to go and when they present themselves oversold to hell - YOU MUST TAKE THEM OUT.
Then - for god's sake - go fishing.
You have a clear choice at that point - watch the screen hoping like hell you picked it right, sweating if you have another down night overseas and thinking damm, I could have got it cheaper tomorrow and worrying whether it will go again tonight ----------------------- or - go fishing.
Go fishing in the knowledge that you made the decision based on dammed good value, well researched, dividend protected stock that will continue to pay you every six months even if everything goes to hell in a hand basket.
Every single time in the last few years - what has actually happened is that the market has indeed recovered - in those solid stocks - stocks that went out with the bathwater.
in the gfc I bought hsn for 30c -------- 30c? - look at hsn during the Japanese quake - what a joke - the market put it down for 2 reasons - 1. it has some business in Japan - hence it must be bad news (turned out to be nothing) 2. some poor buggers needed cash to pay their margins ----- well, whoever bought is smiling - look at the recovery - look at the speed of the recovery - then look at the dividend stream - rock solid.
Plenty of other examples - who bought mcp during the crisis at or below 30c -------- well I can tell you who - they are the one's with the big smiles sitting on the even bigger boats collecting 26c plus franking per year -------- 26c - about the same price you could buy them for in the guts of the crisis.
Many of us just don't realise that this investing caper has changed - and for the smart, it has changed for the better - the more crises the better, the more quakes, the more flash crashes the more greece's - bring em on - as long as your strategies match the modern world - you will benefit greatly - imo, it has never been easier - you just have to have made the adjustment.
If you are still in the buy low, sell high, gear up, get the Porsche mode - then if you aren't dead already - you soon will be ------ it is time to sit back and study this new game - it is well worthwhile.
