10-29-2014, 10:21 AM
(10-29-2014, 09:29 AM)alexg Wrote: ... As part of the curriculum, we ran a virtual portfolio in which we talked about our strategy, holdings, and performance at the end of the semester.
I remember I decided to go with a concentrated portfolio of 5 stocks. If I remember correctly, it was WFC, USB, eBay, and two others. These purchases were made almost at the absolute bottom of the crash. Because my portfolio had 2 financials, my results were mixed but anyway, I remember getting dinged for not diversifying and having too much beta when other students over diversified and/or day traded.
And this seems to be why the average investor underperforms so much.
Any of those strategies can be successful or fail spectacularly over a 1 or 2 semester course. Did they make you do any back tests, forward projections, compare the different methodologies? I'll bet they didn't even mention dividend growth investing but were all about MPT.
I do agree that over the long term value and dividend growth investing (both buy and hold/monitor over an extended period of time) will eventually provide superior returns unless one is exceptionally good at trading & timing.
Alexg, did you think you came away from that course with a better understanding of how markets work and the strategies one can employ? Which strategies seem to be the most productive? I don't think I'd want to participate in that sort of "game" for that short a period of time unless I was a diehard indexer. At least I could rely on the law of averages.