I guess for now my money is confined to my current account

And I do agree that most sites gives garbage advise. You have those Larry, tradeaday etc membership and they just give you some trades which of course over time, some will strike. But nevertheless, it is a waste of money

But if anyone can time the market well, it is really a great job to have. Sigh…guess I will not be one of them. And btw, am I glad I stayed out of stock market over the last years..The sub prime thing will probably have killed me had I stayed on to play…

Trading the markets is definitely a risky business, but keeping a level head, being patient and not being greedy it’s possible to make a steady flow of income from trading currencies.

I rarely invest in the equity market anymore, and focus mainly on forex. It’s no get rich quick scheme, it’s just another form of risky investment. But it has advantages over equity markets.

The possibility to trade 24h/5.5 days a week, and the liquidity can’t be matched by any stock exchange in the world.

PS regarding your other post. Well done on making your adsense revenue a charity gift.

Perhaps the key similarity between gambling and investing is that you’re exposing yourself to a risk with the expectation of a reward.

In gambling, that risk may be random (lottery tickets, slot machines, VLTs) or there may be some aspect of skill involved (poker, etc.) but the odds will never be in your favour unless the casino is in the business of losing money. In the short term, you may make or lose money, but over the long term, your losses should fairly accurately reflect the odds of the game being played.

In the case of investing, you hold your assets in cash, bonds, equities or other securities, but not matter what you choose (even cash), you’re exposing yourself to a risk. Again, in the short time you may experience gains and losses, but over the long term, your performance should very closely reflect the historical returns of that asset or mix of assets. The S&P500 has returned an average of 10.43%/year between Jan 1926 - Dec 2007. Bonds return a fixed coupon which is clearly known as well.

In both cases you expose yourself to risk with the expectation of a reward. If so, then what’s the difference? I’d argue it’s the connotation: a rational person would not gamble, but they would invest — over long periods of time. In the short term, the returns on both may appear random, but long term one is a sensible strategy and the other isn’t.

That said, most investment advisers (and I am not one, so consult your local CPA etc.) advise against “market timing” as an investment strategy. I’d argue market timing *is* gambling; you’re trying to profit by hoping the market does something. The market doesn’t care what any of us thinks or hopes, in exactly the same way as the machine that cranks out the winning lotto numbers doesn’t care what ritual I go through to decide what my lucky numbers are.

Math tells us that a diverse asset allocation across several asset classes is a sensible way of reducing your risk exposure and evening out your returns. And, as a guy who enjoys math… even stats… that seems like a good way to go to me.

Why is putting all your assets in plain Canadian cash not the end-all solution? Think about it this way: you may have ‘lost’ money (as someone who intends to spend in Canada), but you haven’t if you intend to spend it in the US. Similarly, you’ve gained money by not investing it in an S&P index fund over the last 6 months, but you’ve lost compared to someone who shorted Toyota stock.

In other words, no matter what you do, someone made a better investment and someone made a worse one — but in the long term, you’re likely to approach the expected returns for the allocation you’ve selected. Just remember that lotto tickets and blackjack are not likely to be a sound ‘investment’ strategy, but they are definitely gambling

And yes, I agree with you — most “investment” sites giving advice on particular strategies are garbage. If working in equities has taught me anything, it’s that nobody knows what the market is going to do in the short term (and by that I mean anything short of a few decades!) even if long term there’s a pretty clear trend.