Days like Friday are not the norm, and I’m not talking so much about a specific average’s point gain, but the impact for one’s portfolio (namely mine). If you get a day like that 2 or 3 times a year, you can do very well, as long as you don’t blow those gains by getting a fathead. But when those days will come is unpredictable. Everybody knew that with some positive squawking out of Europe, the market could have a good day, but such a good day? This day represented more than 20% of my yearly gains. This day allowed me to sell 4 rich premium covered calls.
If I basically tried to pick my point of entry and exit of the market, it is easy to conceive that I would have been out of the market, since May it went down hill after the start and June only got worse. I hit an all time high on May 1 and Friday closed with me being .4% below that. Since AMLN announced the sale of itself on Friday afternoon, other things being equal, I will be above that point at the open on Monday.But unless somebody has different plans for me, I will still be in the market on Tuesday (and beyond). I have no idea when the next big up day will come, and I’m certain that there will be big down days as well, but over time the market has proven to have an upward bias. Buy and Hold is not dead.