How goes the 'drunken psycho' strategy?

[sasch]

That surprised me, SC, so I went looking for some detail. Found this from the ABC, May 2014.



Even at $55,000 that's much lower than I'd thought. Is the usual stat that's quoted the average, so differs from 'middle'?
Would that figure be before tax also?

Hi Julia,

I think this is referred to as median income, the usual stat that is quoted in the media is the average, which is really quite deceiving. Here is a useful article that explains it much better than I can, which you may find useful.

https://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/

So the average income typically quoted by the media is really only applicable to the top 25th percentile.

There would be hordes of people in retail and hospitality that think that 44k would be pie in the sky stuff from my experience.

 

[Julia]

Sasch, thank you for that. Even though the figures are a bit old now, it still confirms how easy it is to delude the population by quoting always the average.

It underlines the difficulty for so many of being able to get into their first home as well as to meet everyday living costs.

 

[sasch]

So the average income typically quoted by the media is really only applicable to the top 25th percentile.

Correction: this should read - So the average income typically quoted by the media is really only applicable to the top 25 percent of income earners.

 

[Mrmagoo]

http://www.news.com.au/finance/mone...nvesting-secrets/story-e6frfmdr-1227182304217

Just wondering, does anyone here adopt this strategy, where basically you put some money aside each fortnight/month/whatever and put it into the market? What do people think of this strategy?

I read the above, and particularly the bold, and it appealed to me. I know he says not to pick individual stocks, but I am more familiar with that than index funds. So I was thinking I could put some money aside every month, and allocate it to various blue chips depending on the SP at the time, say, for example, CBA, JBH, BHP etc, and just accumulate it for pretty much my entire life instead of looking for selling opportunities.

Thoughts?

lol thats what i do except it is not a little bit but 40% of what I get paid weekly

 

[shouldaindex]

I have a hypothetical scenario to test a stable strategy against the drunken psycho:

10 year time frame, choose 10 stocks (ASX200, equally weighted).

- Buy and Hold for duration.
- Put in a 10% stop-loss upon buying.
- Maximum 3 stocks per sector.

Now try to lose money. I imagine that'd be quite difficult, so looking at it as a strategy to deal with the drunken psycho, it looks quite effective.