As of 04/02/2020   Indus: 21,413 +469.93 +2.2%     Trans: 7,446 +93.13 +1.3%     Utils: 729 +21.32 +3.0%     Nasdaq: 7,487 +126.73 +1.7%     S&P 500: 2,527 +46.40 +1.9%	YTD -25.0%   -31.7%   -17.0%   -16.6%   -21.8%	Targets    Overview: 03/15/2020     19,000 or 25,600 by 04/15/2020   6,700 or 9,000 by 04/15/2020   600 or 800 by 04/15/2020   7,000 or 8,400 by 04/15/2020   2,300 or 2,900 by 04/15/2020
CPI (updated daily): on 4/1/20

As of 04/02/2020   Indus: 21,413 +469.93 +2.2%     Trans: 7,446 +93.13 +1.3%     Utils: 729 +21.32 +3.0%     Nasdaq: 7,487 +126.73 +1.7%     S&P 500: 2,527 +46.40 +1.9%	YTD -25.0%   -31.7%   -17.0%   -16.6%   -21.8%
Targets    Overview: 03/15/2020     19,000 or 25,600 by 04/15/2020   6,700 or 9,000 by 04/15/2020   600 or 800 by 04/15/2020   7,000 or 8,400 by 04/15/2020   2,300 or 2,900 by 04/15/2020
CPI (updated daily): on 4/1/20

Bulkowski's Hold On!

This article discusses how long you need to hold onto a stock to make a profit, based on the performance of a market index.

To make money, how long should you hold onto a stock? I'll give you the probabilities in a moment, but here's how I did it. I downloaded the daily, weekly, and monthly price data from yahoo finance using the S&P 500 index and then went to work. The data ranges from January 3, 1950 to April 13, 2010. For the computation, I used overlapping periods. For one year, as an example, I determined whether price closed higher from April 1, 2010 to May 1, 2009. Then I used the next month, March 1, 2010 to April 1, 2009, and so on. I summed the number of up closes compared to the number of samples and found the percentage.

In other words, I counted the number of times price closed higher for each period. The table below shows what I found.

For example, if you bought the S&P 500 index and sold it a day later, you would have a 53% chance of making money -- all else being equal. If you hold onto the index for a week, the probability of a gain rises to 56%. Hold for 5 years, and the probability rises to 83%.

If you are having problems making money in this market, then consider holding longer. Or just buy low and sell high.

-- Thomas Bulkowski

 

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