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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » short, medium or long term?

short, medium or long term?

4 posters

Go down  Message [Page 1 of 1]

1short, medium or long term? Empty short, medium or long term? Mon May 23, 2011 5:26 pm

lkboyinuk


Stock Trader

in my point of view i prefer short term investment on share market as we can predict a near future than a longer time period ,so the thing i cant still understand is why the people who introduce them as experts say go to long term investments and avoid short term investments?

2short, medium or long term? Empty Re: short, medium or long term? Mon May 23, 2011 5:44 pm

StocksWatch


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

I am not an expert but you may wish to visit following link;

http://www.obliviousinvestor.com/long-term-predictability-and-short-term-unpredictability/

3short, medium or long term? Empty Re: short, medium or long term? Mon May 23, 2011 5:56 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

lkboyinuk wrote:in my point of view i prefer short term investment on share market as we can predict a near future than a longer time period ,so the thing i cant still understand is why the people who introduce them as experts say go to long term investments and avoid short term investments ?

I am not an expert. It depend on your choice. If one wishes to go with short term it is not a crime if you know what yo uare doing.

But just remember medium and long term investors are needed to sustain the market. Think what will happen if EPF , SLIC and peoplle like Mr Captain, D Perera all started trading in the market. What will happen to retailers.


Let me give you another example.

Say X share can be valued at RS 150. You buy at Rs 100. Within a day it goes up 10% and are happy with short term gain. You sell. And pay CSe fees. Then after some time it starts going up again . But you have moved to another counter on short term and have no time or money to react. Someimes If an investor does not study a full valuation of a share and does not hold as investment he/she can miss the chance for higher gain
EX: THis is a true situation.

BFL went from Rs 220 to Rs 290 in 3 days. Some thinking short term dumped them at Rs 290,280 thinking they can buy lower again after few days. Well after a couple of days all of a sudden with a few minutes it pick up from Rs 270 and went over Rs 290 . Within a few day it went to Rs 500 . Many short term traders could not react with a ferw minutes as they were not expectign this to pick up so soon and possibly had to buy at higher prices than they sold if they wanted to. If they held longer the full benefit would have got and this missed chance will not be there.

When you buy an undervalued and funadamental share it can have higher value in the medium to longer term than shorter term.



Anyway, I believe a good retail investor needs to have short term, medium term and long term in the portfolio.

Another point,

Unless we have time, we cannot keep monitoring share market all the time. Say you have 15 shares in your portfolio. No one can watch all 15 at the same time. So if you have soem medium term, long term share you leave them aside with peace of mind.
When you put an FD you forget about it as you know it is secure and a guaranteed return and year after year you can compound intest if needed. Long term investments are like that. If you buy a fundamental and strong share you know that it will keep growing . So you can buy it and forget it without worrying about short term fluctuations as you know it will pick upo again. If you buy bad sahre short term there is a possibility it might never recover ( I am not saying it won;t)

Some time Shor term trader who buy high can automatically become medium term traders as selling low will be not wise.


These are my views only as I also believe in Investing. Some short term trader who are highly skilled may be able to avoid the issues as above. But not everybody will be sucessful.

Hope my view will give different light.



Last edited by slstock on Mon May 23, 2011 6:15 pm; edited 1 time in total

4short, medium or long term? Empty Re: short, medium or long term? Mon May 23, 2011 6:10 pm

StocksWatch


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Both short and long term players are essential for a healthy stock market. Without the short terms traders, there wont be much liquidity. Also without long term investors, the market will not sustain.

As far as an individual is concerned, he has to develop his own strategy considering his investment objectives, risk tolerance, time availability, expected return etc.

As for me, I prefer to have a combination of short and long term investments in my portfolio. After all limiting only for long term investing is so boring Wink

5short, medium or long term? Empty Re: short, medium or long term? Mon May 23, 2011 6:26 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

StocksWatch wrote:Both short and long term players are essential for a healthy stock market. Without the short terms traders, there wont be much liquidity. Also without long term investors, the market will not sustain.

As far as an individual is concerned, he has to develop his own strategy considering his investment objectives, risk tolerance, time availability, expected return etc.

As for me, I prefer to have a combination of short and long term investments in my portfolio. After all limiting only for long term investing is so boring Wink
Agreed all 3 types are needed in a stock market. Withotu short term trader there will be no significant price rise . So they are important too.

6short, medium or long term? Empty Re: short, medium or long term? Tue May 24, 2011 3:40 pm

lkboyinuk


Stock Trader

Hi friends,
I posted this to have a proper discussion about the matter i really had, but not to insult any one . by the way thanks for your dedictation lol!

7short, medium or long term? Empty Re: short, medium or long term? Tue May 24, 2011 4:29 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

lkboyinuk wrote:Hi friends,
I posted this to have a proper discussion about the matter i really had, but not to insult any one . by the way thanks for your dedictation lol!

No prob lkboyinuk . We were all sharing ideas to your post.

8short, medium or long term? Empty Re: short, medium or long term? Tue May 24, 2011 8:13 pm

xhora

xhora
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Bounded rationality

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