As of 01/24/2020   Indus: 28,990 -170.36 -0.6%     Trans: 11,060 -83.58 -0.8%     Utils: 932 +3.37 +0.4%     Nasdaq: 9,315 -87.57 -0.9%     S&P 500: 3,295 -30.07 -0.9%	YTD  +1.6%    +1.5%    +6.0%    +3.8%    +2.0%	Targets    Overview: 01/14/2020     29,500 or 28,300 by 02/01/2020   11,500 or 10,700 by 02/01/2020   1,025 or 900 by 02/01/2020   9,600 or 8,900 by 02/01/2020   3,350 or 3,200 by 02/01/2020
Chart pattern indicator: on 1/24/20

As of 01/24/2020   Indus: 28,990 -170.36 -0.6%     Trans: 11,060 -83.58 -0.8%     Utils: 932 +3.37 +0.4%     Nasdaq: 9,315 -87.57 -0.9%     S&P 500: 3,295 -30.07 -0.9%	YTD  +1.6%    +1.5%    +6.0%    +3.8%    +2.0%
Targets    Overview: 01/14/2020     29,500 or 28,300 by 02/01/2020   11,500 or 10,700 by 02/01/2020   1,025 or 900 by 02/01/2020   9,600 or 8,900 by 02/01/2020   3,350 or 3,200 by 02/01/2020
Chart pattern indicator: on 1/24/20

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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