In: Finance
Bogelheads believe in market timing provided an advisor is carefully chosen.
a) Do you agree with the above statement?
b) What strategy works best for investing?
c) If your portfolio's value decreases by more than the market what is one explanation?
d) Are you a bogelhead? Why or why not?
a) No boggle head investing does not believe in market timing. Infact, Bogelheads believes that market timing is hazardous to wealth.
b) The best strategy that works for investing is buy low and sell high. Investors should buy undervalued stocks and sell them when the price rises . At the same times, investors should be careful about the nature of the company , that they are investing in they should choose only the financially sound companies.
c) If our portfolios value decreases more than the market, it simply means that the stocks that are comprising the portfolio have faces unsystematic risk specific to the particular stocks.As a result of which, the value of the portfolio has fallen more than what the market has fallen,
d) Yes, i am a bogglehead. As this strategy helps in planned and regular investing , they believe in diversification of portfolio to reduce the systematic risk , tracking the portfolio regularly and rebalancing it when required. So, yes investing this way helps creating wealth in a conservative manner.