The Long-Term Market Watcher
The long-term market watcher is associated with the buy-and-hold approach. Long-term investors may evaluate their investments rarely, and reallocate only once every year or many years. They tend to have a more laissez-faire attitude toward their investments, relying upon the "efficient market" model to produce the optimum results if left alone. This type of market watcher pays attention to the long-term fundamentals when making investments, and once committed is willing to overlook cyclic fluctuations and to ride out down markets. The buy-and-hold investor employs a version of market timing that is based upon the assumption that by maximizing the time invested, the chances of seeing an optimum gain in the value of the investment will also be maximized. These investors tend to feel that the value of an investment account (unlike the number in a bank account) is not real until the asset is sold, and that there is no reason to sell until one can make a profit. The long-term market watcher needs to visualize historical market trends averaged on a semiannual (120-day, meaning 120-trading-session) ,or annual (250-day, meaning 250-trading-session) time scale. Chart products for the long-term investor are collections of 120-day-average charts, updated monthly, or 250-day charts, updated bimonthly. They are identified by a prefix consisting of "H" or "A" and a second character that indicates the type of averaging, e.g., "M" indicates monthly updating while "W" designates weekly updating.