Trading/Timing the Market

EdGasketTheSecond

Thrugelmir wrote: »

How you determine when a share is undervalued. Share prices are driven by opinion. Based on known facts.

I have a method which works quite well. It is for each to find their own and I'm not telling what mine is for free.

John_G_Jones

EdGasketTheSecond wrote: »

I have a method which works quite well. It is for each to find their own and I'm not telling what mine is for free.

How good is it? Best way to see is to check your Sharoe ratio over a good length of time, as otherwise people have an amazingly strong tendency to remember the hits and to write off the losses as being down to outside events.

arnoldy

On a similar theme, but not exactly trading there is one advantage for the small investor. That is being able to move quickly and buy on ‘dips’ in quantities that won’t move the market. Large funds probably find it hard to do this. I do this with my dividend reinvestment but I check the live stock market RNS service and internet to make sure there isn’t a reason for a dip! Also watch the spreads and dealing costs as a proportion of the funds re-invested.

bostonerimus

EdGasketTheSecond wrote: »

I have a method which works quite well. It is for each to find their own and I'm not telling what mine is for free.

Exactly...this is how all charlatans operate. The simple logic is that if someone has a method that works well, why would they need to sell it to others.

My method is to use broad indexes and rebalance and it's given me an 8.6% annual average return over the last 30 years...no charge for that as it is bog simple and can be found free from numerous sources.

bostonerimus

Sally57 wrote: »

It has worked out well for him at this stage because the value of his ISA portfolio is now around 20% more than mine.

I think he should stop trading like this while he is ahead and now stay fully invested but he still thinks there is some reasoning in what he is doing? Anybody have any thoughts on this?

I'll assume that your husband hasn't cracked how to guarantee beating the market and he's been trading on gut maybe backed up by some P/E ratios or other short term statistics. You are factoring in risk to your investment decisions and your husband doesn't seem to be doing that. I think that makes you the more sophisticated investor.

The way you should approach investing is not to compare the size of your pots, but to set yourself a financial goal and them develop a strategy that maximises the probability that you will reach you goal. If the added risk that your husband is taking is not necessary to reach your goals then he is being foolhardy.