Time Diversification Works

I have personal, real-time proof that time diversification works. No surprise, actually, as one can prove that mathematically. But even in the recent market debacle of an alltime high in the S&P and then a bone-shattering 50%+ fall, investing over time can put one ahead.

Here's the proof.

In early 2007, I opened an joint account with Mrs. B at a local stock broker's office - a real full service broker, by the way. I put quite a bit money into this account in 2007 when the S&P was near its all time high over 1500. Over the next three years (approximately), more money was added including a good chunk in October 2008 when the fear factor was very high. Some of that was used to buy municipal bonds, but some was put into stocks, too (US big cap stocks). I checked the account this morning and it shows an overall gain. Yes, even now with the S&P at only 75% of its value when we started, the account shows a profit.

I make this point because some pundits are saying that long term investing is dead, that every one should trade, and that "buy and hold" is dead. This is irrefutable proof that investing long term with time diversification works even in very hard markets.

The proper investment method was never "buy and hold". It's always been buy over time and re-allocate among asset classes. Let's kill the straw man of "buy & hold" once and for all. And at the same time, put a sock in the big mouths of the new pundits advocating trading for all, or worse, advocating using professional managers in hedge funds.

Languages

My effort to learn six languages continues. I've accelerated my Italian work and slowed work on Spanish. I just like Italian better: it's poetic, very expressive, not grammatically hard, easy to pronounce, and culturally rewarding. Polish, German and French work continues as before. My ability to read newspaper headlines in all three is making marked improvement. Of course, my French is much further along as I started it six months earlier than the others.

Fwiw, I work on these about three hours a day, more or less.

Actions

I sold the put options yesterday morning when the market turned up. The pressure of loss of time premium is very large this close to expiration, so I elected to get what I could out of this position before it was wiped out. The New Year effect I was looking for clearly was not happening. Better to 23 skiddoo. I'll wait now for a new idea for my speculations.

Word of the Day

"Heigh-ho" - interjection [$10] from Shakespeare
Heigh-ho expresses boredom, resignation, etc.
Sentence: For the last few days of news - actually, the lack thereof - all I can say is, heigh-ho.