Of course they blame Greenspan.
Tuesday's little stock market tremor really gave me a taste of what the Market Crash of '29 must have been like - I got to work, checked marketwatch, parsed it for about 5 minutes, and then started thinking "SELL SELLL SELLLLLLL". So, I dumped MT and PCU (steel and copper companies) as fast as I could, figuring the others would be less volatile.
haahahaahaha
If I had held onto them, I would have a few thousand more in our little virtual stock exchange game. Which, Patrick, was a totally genius move on your part. What better way to learn what NOT to do than play with loads of risk free money? Like selling off bubbly stocks too soon.
NPR today was talking about how the "dollar-cost average" effect gets less returns in the long run than the "buy low, sell high" philosophy, and it'd be interesting to pit the different strategies against each other. Usually I'm a fan of the DCA, because that's how my dad taught me to invest, but a work friend follows the BLSH, and both seem to be working...but now I'm willing to believe my returns are probably lower than they would be if I were trying to profit-take.
In the end though, the market is so irrational. Or I am, because I don't understand what's going on AT ALL.
*edit* A friend just sent me the 5 Geek Social Fallacies. Obviously not written by a writer, but decently thought out. What do you think, friends of geeks?
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The $30 commission is also unrealistic, as Scottrade offers 7$ commissions. And if we were really "day-trading", we could probably get almost-free trades. But that's a minor gripe that Patrick's already sick of hearing :).
The tax-free aspect is unrealistic for a plain brokerage account, but is what it's like to have a 401k or a RothIRA.
marketwatch
I am of the 'lazy' portfolio investment strategy, which can be particularly effective if you don't have a lot of money with which to diversify your investments. (I also just recently learned that my investment strategy has the name 'lazy'... thanks Yahoo Finance!) Basically, using either ETFs or no-load mutual funds, you buy stocks (funds) that index various sectors of the market. This significantly reduces your investment risk, by broadening your portfolio more than is usually possible for investors with relatively little to invest.
I had been happy with my strategy until China freaked out, which dropped my 'emerging markets' etf by 8% in a day. I held onto it the next day, where it actually gained, but then this morning when I checked in it had dropped a lot again. This scared me into selling, which thinking back was a mistake, and I wish I hadn't. As you said May, it's good to learn these things with fake money.
Anyway, the advantage of the 'lazy' investor strategy is that the market almost never beats you, and you don't need to continually spend a lot of time picking out stocks, and stressing about when to sell them. Index funds are designed to be held for years at a time.
Also, as a side note, this game is very unrealistic in one respect: no taxes on earnings! This makes you feel like you are getting more on your returns for 'day trading' than you actually are.