As of 12/06/2019   Indus: 28,015 +337.27 +1.2%     Trans: 10,709 +133.66 +1.3%     Utils: 855 -1.82 -0.2%     Nasdaq: 8,657 +86.13 +1.0%     S&P 500: 3,146 +28.48 +0.9%	YTD  +20.1%    +16.8%    +19.9%    +30.5%    +25.5%	Targets    Overview: 11/29/2019     28,600 or 27,600 by 12/15/2019   11,300 or 10,500 by 12/15/2019   875 or 830 by 12/15/2019   8,900 or 8,400 by 12/15/2019   3,250 or 3,075 by 12/15/2019
Chart pattern indicator: on 12/4/19

As of 12/06/2019   Indus: 28,015 +337.27 +1.2%     Trans: 10,709 +133.66 +1.3%     Utils: 855 -1.82 -0.2%     Nasdaq: 8,657 +86.13 +1.0%     S&P 500: 3,146 +28.48 +0.9%	YTD  +20.1%    +16.8%    +19.9%    +30.5%    +25.5%
Targets    Overview: 11/29/2019     28,600 or 27,600 by 12/15/2019   11,300 or 10,500 by 12/15/2019   875 or 830 by 12/15/2019   8,900 or 8,400 by 12/15/2019   3,250 or 3,075 by 12/15/2019
Chart pattern indicator: on 12/4/19

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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