tag:blogger.com,1999:blog-5465015914589377788.post509559807482401032..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Recognizing When Investing Advice Amounts to Buy High and Sell LowMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-5465015914589377788.post-31522700460710527722012-05-28T10:51:25.713-04:002012-05-28T10:51:25.713-04:00@Mike: Your comment reminds me of the Wolfgang Pa...@Mike: Your comment reminds me of the Wolfgang Pauli quote “This paper is so bad it is not even wrong.” You prefer a specific momentum strategy that can prove to be profitable or unprofitable to something vague that isn't even wrong.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-81583048193754621462012-05-28T10:46:18.017-04:002012-05-28T10:46:18.017-04:00I've seen this kind of advice from many invest...I've seen this kind of advice from many investment types. The problem I have with this sort of thing is that it seems like there is no real investing strategy. <br /><br />I have more faith in someone with a momentum strategy (where you typically have to wait for a stock to go up before buying or go down before selling) who has an actual plan with metrics and specific actions tied to specific movements in the stock that they follow. And of course they still need to measure performance against an index.<br /><br />Of course, I think momentum investing is hogwash, but at least a solid, definable and actionable plan is better than a vague "sell when things aren't going so well" kind of nonsense.Mike Holmanhttp://www.moneysmartsblog.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-51957551039491916212012-05-28T09:21:43.235-04:002012-05-28T09:21:43.235-04:00@Anonymous and @Chris: It seems that you have to ...@Anonymous and @Chris: It seems that you have to be knowledgeable enough about finances to distinguish the good advice from the bad.<br /><br />@Dan: That quote completes the "buy high" part; I had mainly focused on the "sell low" advice.<br /><br />@MarkH: I agree with you that a disciplined buy-and-hold strategy with a basket of inexpense broad-market ETFs with beat expensive active mutual funds over the long term. However, I can understand people who prefer TD's e-Series mutual funds becuase they are more comfortable with mutual funds than ETFs.<br /><br />You're exactly right about the problem with buying funds that have performed well recently. Pape didn't even both to address research saying that performance-chasing in mutual funds lowers returns.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-52633998305219448982012-05-28T09:10:43.900-04:002012-05-28T09:10:43.900-04:00I lost all faith in Gordon Pape when he began push...I lost all faith in Gordon Pape when he began pushing the line that he was unconvinced that investing in ETFs was the best strategy for most investors and that he continued to recommend well-run out-performing Mutual Funds. This despite all evidence out there that ETFs will invariably outperform Mutual Funds in the medium to long term.<br /><br />In fact, now that I think about it, investing in well-run Mutual funds (as Pape recommends) is akin to this latest recommendation of his. Isn't investing in a well-run out-performing Mutual Fund just the same as buying at the top of the market (i.e. AFTER this well-run Mutual Fund has been briefly out-performing)? Research shows that Mutual Funds that have out-performed for a period will generally under-perform in the following periods. Buy an out-performing Mutual Fund and you'll like find that going forward it will significantly under-perform.<br /><br />Best advice to investors is to just ignore Gordon Pape.MarkHhttps://www.blogger.com/profile/00204006032284165374noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-22995720235883216832012-05-28T09:00:16.875-04:002012-05-28T09:00:16.875-04:00This advice is typical of the author in question.
...This advice is typical of the author in question.<br /><br />From a previous articles: "As a general rule (and there will be exceptions) wait until the indexes have rebounded by 15%-20% before you move [back into the stock market]."<br />http://www.gurufocus.com/news/141337/decision-time-what-kind-of-investor-are-you-<br /><br />Yes, it is definitely better to wait until prices are 20% higher before you buy. Woe to the long-term inbvestor with this kind of mindset.Canadian Couch Potatohttp://canadiancouchpotato.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-5227775184018725812012-05-28T07:06:34.688-04:002012-05-28T07:06:34.688-04:00I take advice from Mr. Pape with a grain of salt. ...I take advice from Mr. Pape with a grain of salt. This is the guy that peddles those wealth destroying reverse income mortgages to seniors.Chrisnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-52805127253347888922012-05-28T00:28:02.007-04:002012-05-28T00:28:02.007-04:00Good point. While I am sure Mr. Pape provides some...Good point. While I am sure Mr. Pape provides some decent advice at times, he should be taken with a significant grain of salt.Anonymousnoreply@blogger.com