As of 09/25/2020   Indus: 27,174 +358.52 +1.3%     Trans: 11,270 +152.52 +1.4%     Utils: 808 +12.20 +1.5%     Nasdaq: 10,914 +241.29 +2.3%     S&P 500: 3,298 +51.87 +1.6%	YTD -4.8%    +3.4%   -8.1%    +21.6%    +2.1%	Targets    Overview: 09/14/2020     28,650 or 26,000 by 10/15/2020   11,750 or 10,600 by 10/01/2020   845 or 775 by 10/01/2020   11,800 or 10,400 by 10/01/2020   3,600 or 3,200 by 10/01/2020
CPI (updated daily): on 8/18/20

As of 09/25/2020   Indus: 27,174 +358.52 +1.3%     Trans: 11,270 +152.52 +1.4%     Utils: 808 +12.20 +1.5%     Nasdaq: 10,914 +241.29 +2.3%     S&P 500: 3,298 +51.87 +1.6%	YTD -4.8%    +3.4%   -8.1%    +21.6%    +2.1%
Targets    Overview: 09/14/2020     28,650 or 26,000 by 10/15/2020   11,750 or 10,600 by 10/01/2020   845 or 775 by 10/01/2020   11,800 or 10,400 by 10/01/2020   3,600 or 3,200 by 10/01/2020
CPI (updated daily): on 8/18/20

Bulkowski on the Optimum Trading Hold Time

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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