How Long Do You Stick to a Long-Term Outlook?
By Rev Shark Street.com Contributor 7/17/2007 11:33 AM EDT
Aaron Task, in his always interesting podcast, conducted an interview yesterday with Tobias Levkovich, chief U.S. strategist at Citigroup. Levkovich made it quite clear he is bullish, and apparently believes the market will stay strong, due to good earnings, into 2009.
"[If you're] trying to get too cute now [in forecasting a reversal] ... you'll leave a lot on the table," he says, according to Task.
What I found most striking about this was the willingness to predict how the market would be acting a year or more from now. Is this something that is important for the average individual investor to consider, and if so, what should he or she do with such information?
Do you simply buy and hold on, and ignore any negatives that pop up in the interim? Do you shrug off technical deterioration if that occurs?
What I find difficult to understand about such long-term market predictions is whether or not they preclude you from being flexible. When you make a call like this, at what point, if any, do you change your mind?
In my opinion, long-term market predictions are useless for most average individual investors. I do not believe anyone knows what market conditions are going to be like three months from now, let alone more than a year from now.
What good does it do us to buy into one of these predictions and give up the great power we have in reacting to changing market conditions?
Sure, it makes for good press and generates publicity when a strategist makes these sorts of calls. If he is correct, he can wear the prediction as a badge of honor, and if he is wrong, we won't know for sure for quite a while, and he can come up with something else that is equally provocative.
Long-term market predictions are entertaining, but it is not the road to profits, unless you like gambling.
Das sollte man in Ergänzung zu # 116 berücksichtigen.
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