Thursday, November 23, 2006

Making Sense of Stock Market

For any given future time period, there is no assured strategy for:

  1. Making money, however small the transaction cost.
  2. Losing money, if transaction cost is zero.
  3. Protecting your wealth (against inflation) that completely ignores stock, commodity or other markets.

Corollary: Active trading in a system with non-zero transaction cost makes 2 achievable and 1 unlikely.


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