Staying Course Typically Reaps In Rewards
2/25/2015
This amazing underperformance puts in one’s head the notion that it is the little guy who is dumb and should be the contrarian, indicted for getting in and out of the stock market. Moreover, the fact is the little guy has gotten out by $600 billion as measured by mutual funds and ETFs, while institutions (insurance companies, big business, colleges, and municipalities) poured in the same exact amount. That institutional money typically stays the course and it has been rewarded handsomely. Those hedge funds on the other hand keep underperforming this amazing rally. It is nuts to think about the folks watching from afar that have fared better in the market than the experts. Oddly, this helps my bull case. These funds have to make good and this next leg is a chance to get in the game, making part of the ride self-fulfilling. Here's the problem for all investors...money is moving around too quickly as the average holding period for stock has nosed dived from 12 years in 1940, to less than a year today. Moreover, it is too much trading in an effort to beat the market on a daily basis.
Charles Payne
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