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shorting does increase short-term volatility.
that may not matter: you may be in a position to ride out the volatility, or even to take advantage of it.
but in some circumstances, it can also have long-term effects. for instance, suppose a company would like to have a rights issue, but they can't (or not so easily) because the share price is temporarily low, or just more volatile (and greater volatility alone can make it harder or more expensive to get a rights issue underwritten). if they abandon the rights issue, that can have a long-term effect on the company.
so i think there's a least a good question about whether long-term holders are shooting themselves in the foot by lending stock to ppl who want to short it.0 -
Ftse total returns...back 1999...now you can see what can happen after 10 years.0
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I've always taken the view that all the short-term trading, shorting, hedging, and such like is all just zero sum noise. If long-term holders can make a dishonest buck from pandering to the foibles and whims of the gamblers and gamers, then so be it.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Ftse total returns...back 1999...now you can see what can happen after 10 years.
Sorry to be churlish, but 1999 was 14 years ago. Why do people keep picking 1999 I wonder?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
with the dividends since lauch ...
without..0 -
with the dividends since lauch ...
And again, isn't it odd how the media always focus on the latter graph when talking about the "lost decade" for equities, which is now the lost 14 years.
(Actually, what worries me more is that the media are now starting to talk up equities again. No good will come of this. It never does.)I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
BTW, why are those graphs over slightly different periods? No TR data for the first couple of years? Can we see ones that match exactly, just for completeness?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Also, why are such graphs always on a linear scale? It makes history look like a steady rise and the present look frightening. Despite appearances the little blip in 1987 was of a similar magnitude to the recent crashes, a drop of around 50%0
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Plotting this with inflation adjustment would fix that, but it would also rather inconveniently show that the "lost decade" was pretty well named!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »Plotting this with inflation adjustment would fix that, but it would also rather inconveniently show that the "lost decade" was pretty well named!
If you base your investing on the FTSE100, even with dividends reinvested, you are right. A return not too different to RPI.0
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