Comments on: Passive Investing and the Ostrich Effect

By: Donna J. Sheridan

Donna J. Sheridan — Tue, 17 May 2011 17:20:31 +0000

It is true that passive investors are not trying to time the marketplaces. They are usually buying and holding traders who set a resource allocation and rebalancing periodically. There is a core belief that their opportunities are going to be lucrative in the long run. But in my own beliefs, passive investing is not my cup of tea.
Donna J. Sheridan´s latest post ..Start Your GMAT Test Prep Early and Study Consistently

By: Jane Levington

Jane Levington — Tue, 17 May 2011 17:12:30 +0000

I have noticed that there are lots of passive traders that are enthusiasts towards the concepts of contemporary Portfolio Theory. I am not so cracked on it myself, but others find some benefits of going for a passive method of trading. For me, the Ostrich effect is a great term to explain passive buy and hold which I’ve arrived and opposed that it is not a beneficial strategy.
Jane Levington´s latest post ..Isla Gecko Resort

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Interest Rates: 2010 Mid-Year Review | Balance Junkie — Wed, 30 Jun 2010 09:50:31 +0000

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By: Ignorance Makes You a Better Investor & Other Money-Losing Fallacies | Balance Junkie

Fri, 11 Jun 2010 14:23:50 +0000

[...] also chose this article because these same arguments are trotted out by the ostrich crowd every time the market takes a dip. I just wanted to point out some of the questionable logic [...]

By: Where Is the Stock Market Headed Next? Part I | Balance Junkie

Where Is the Stock Market Headed Next? Part I | Balance Junkie — Tue, 08 Jun 2010 09:50:31 +0000

[...] disagree with the idea of even raising the question. I’ve written a couple of articles about the ostrich effect and the other pitfalls of passive investing recently, so I won’t go into those issues again [...]

By: Silence Is Golden: How Quiet Can Be Profitable | Balance Junkie

Silence Is Golden: How Quiet Can Be Profitable | Balance Junkie — Wed, 02 Jun 2010 19:40:56 +0000

[...] I don’t think it’s the greatest idea to ignore all financial commentary as advocated by passive investing purists. Still, it’s very hard to know which information sources are the most credible and [...]

By: Black Coffee: My Favorite Blogs, Money News & Opinions #48 (The How's It Feel to be Rich? Edition )

Sat, 29 May 2010 22:08:01 +0000

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By: 2 Cents

2 Cents — Sat, 29 May 2010 13:48:07 +0000

I wonder what kind of animal a more active index investor would be? Being Canadian, maybe I’ll vote for the industrious beaver. I think that there are a lot of different degrees of passivity, but that being 100% passive can be dangerous.

By: Len Penzo

Len Penzo — Sat, 29 May 2010 00:59:05 +0000

I’m one of those index investors who certainly doesn’t believe in buy and hold. An ostrich I am not! One thing index investing does is allow you to make broader decisions based upon macroeconomic conditions, rather than analyzing the fundamentals of a particular company.

To me, this is a much easier way to go. When I see signs that the overall economy is ready for a downturn, I adjust accordingly.

That strategy definitely saved my butt in 2008 – by the time the market crashed, I was long gone from stocks.

Best,

Len
Len Penzo dot Com
.-= Len Penzo´s last blog ..19 Things Your Suburban Millionaire Neighbor Won’t Tell You =-.

By: Weekly Round Up-Euro Trip Edition

Weekly Round Up-Euro Trip Edition — Fri, 28 May 2010 11:02:59 +0000

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By: 2 Cents

2 Cents — Thu, 27 May 2010 14:33:26 +0000

I used the ostrich reference in a post a few days ago and I didn’t realize at the time that there was an actual behavioural finance term called the ostrich effect. I just couldn’t resist writing about it. Plus, I got to put a hilarious ostrich image on my blog.

In all seriousness, however, I actually do think that a strict buy and hold strategy can be just as risky as day trading – some would argue more so. Even if you want to hold for a longer term, you need some type of exit strategy and risk management policy to control losses. Thanks for your comment!

By: WealthWebGurus.com

WealthWebGurus.com — Thu, 27 May 2010 14:11:18 +0000

Another great post. I’ve always said that buy and hold ignores one of the key fundamental components of making money and that’s the sell side of the equation. The Ostrich effect is a good term to describe passive buy and hold which I’ve come to really argue is not a great strategy. (http://www.wealthwebgurus.com/article/884/buy-and-hold-does-not-always-work.aspx).
.-= WealthWebGurus.com´s last blog ..Duties of an executor – an executor’s checklist =-.