Why Most investors Underperform the Indices

InvestorEducation / Learning to Invest Jun 19, 2023 - 03:13 AM GMT

Time and time again I hear this mistake in the comments section, S&P is going down down should I sell x,y,z, stock and buy back later. As I often voice the indices such as the S&P are a red herring, ask anyone heavily invested in the likes of Apple, Nvidia or Microsoft and so on, The S&P is definitely not of much use for timing purposes in terms of accumulating and distributing as we saw this past week opps to distribute in the likes of MGNI and accumulate in the likes of Qualcom. So keep things in perspective, the indices are just that indices, a metric to gauge the direction of travel on an average basis and to perhaps swing trade the index but they are not that useful for buying and selling individual stocks, in fact can prove highly dangerous! For instance if the S&P looks toppy and a stock breaks higher then the investor might sell the strong stock. (META) as the index was heading lower. Similar for when the index is going up and a stock starts falling and the investor buys on perception that the stock is now cheaper (SVB).

The indices are a RED HERRING! The more ones focuses on them the more one will become one with the herd and always wonder why one failed to buy x,y,z stock when it was dirt cheap or clung on to an expensive stock for far too long eventually giving up most of ones gains, it's because of focusing on the WRONG THING! The indices rather then the actual STOCK! Indices will encourage you to BUY garbage and SELL your best stocks which is why MOST investors UNDERPEFORM the indices!

This ARTICLE is an excerpt form my recent analysis on the current state of the stocks bull market as it FOMOs to new highs Stock Market Fundamentals, Debt Ceiling Smoke and Mirrors Circus that was was first made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $5 per month. https://www.patreon.com/Nadeem_Walayat.

For Immediate first access to ahead of the curve analysis as my extensive analysis of the stock market illustrates (Stocks Bear Market Max PAIN - Trend Forecast Analysis to Dec 2023 - Part1), that continues on in the comments section of each posted article, all for just 5 bucks per month which is nothing, if you can't afford 5 bucks for month then what you doing reading this article, 5 bucks is nothing, if someone did what I am doing then I would gladly pay 5 bucks for it! Signup for 1 month for a taste of the depth of analysis that cannot be beat by those charging $100+ per month! I am too cheap! I am keeping my analysis accessible to all, those willing to learn because where investing is concerned the sooner one gets going the better as portfolios compound over time, $5 month is nothing for what you get access to so at least give it a try, read the comments, see the depth of analysis, you won't be sorry because i do do my best by my patrons, go the extra mile.

S&P

Targetting 4500 Mid Summer 2023.

And gain access to the following most recent analysis -

So for immediate first access to to all of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $5 per month. https://www.patreon.com/Nadeem_Walayat.

My Main Analysis Schedule:

How to Get Rich - 85%
US House Prices Trend Forecast - 50%
Global Housing / Investing Markets - 50%
US Dollar / British Pound Trend Forecasts - 0%
High Risk Stocks Update - Health / Biotech Focus - 0%
State of the Crypto Markets
Gold and Silver Analysis - 0%

Again for immediate access to all my work do consider becoming a Patron by supporting my work for just $5 per month. https://www.patreon.com/Nadeem_Walayat.

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your trimming the FOMO rally analyst.

By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.