tag:blogger.com,1999:blog-37886248.post6035264087725260400..comments2024-03-22T00:35:19.082-07:00Comments on Casual Kitchen: Money Sundays: High Frequency Trading (HFT) and Why So Many Think the Stock Market Is RiggedDanielhttp://www.blogger.com/profile/02388302796031288076noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-37886248.post-24709159976356175812014-04-15T04:15:23.783-07:002014-04-15T04:15:23.783-07:00I hear you. But I think "the stock market is ...I hear you. But I think "the stock market is rigged" is just the wrong paradigm for how to think about it. <br /><br />There are always going to be situations where some investors are more informed, smarter, work harder, whatever. At times those investors may be on the other side of your trade, so to speak. But if you've chosen an attractive value at which you'd buy a given investment, whether the market's "rigged" or not doesn't matter. <br /><br />For investors who don't buy individual stocks, having a set percentage mix of stocks/bonds/cash and rebalancing once a year or so effectively does the same thing. <br /><br />There's a quote from Buffett that's directly relevant: <br /><br />"If a moody fellow with a farm bordering my property yelled out a price every day to me at which he would either buy my farm or sell me his -- and those prices varied widely over short periods of time depending on his mental state -- how in the world could I be other than benefited by his erratic behavior?" Buffett writes. "If his daily shout-out was ridiculously low, and I had some spare cash, I would buy his farm. If the number he yelled was absurdly high, I could either sell to him or just go on farming."<br /><br />The point here is the market (and the other participants in it) don't matter nearly as much as whether you've made an investment at a proper price at a good value. <br /><br />DKDanielhttps://www.blogger.com/profile/02388302796031288076noreply@blogger.comtag:blogger.com,1999:blog-37886248.post-3297551214125422692014-04-07T09:12:14.820-07:002014-04-07T09:12:14.820-07:00interesting post. :-) I would say ...
I *do* be...interesting post. :-) I would say ...<br /><br />I *do* believe the stock market is rigged, in that I think it is almost certainly manipulated by high-volume traders (not necessarily by high-frequency traders); BUT<br /><br />I *do not* believe that this is likely to seriously damage my own investments as long as I buy and hold. If I try to game things, I will lose (statistics bear this out) but if I am patient and continue to contribute, things will work out in my favor over time.<br /><br />My retirement account is in a stock-heavy 401(k). By stock-heavy I mean it's 80% in stock mutual funds and 20% in bonds.<br /><br />The strongest determinant to lifetime success in investing is simply *putting money in the account.* That's what I've done faithfully over time, and as the market has risen so has my portfolio.<br /><br />Sure, things go down occasionally. Perhaps when the high-volume buyers decide it "should." But as long as I leave it alone it's going to be fine.<br /><br />The worst thing I could have done would have been to convert to cash at the bottom of the market and then sit around and say "it's all rigged, I'm never buying stock again."<br /><br />It may well be rigged, but the point is that is rigged to make a profit for people who own stocks.chacha1http://www.ombailamos.comnoreply@blogger.com