Buying and holding over a very protracted period of time (decades) seems to work.
Bridgewater Bets $1.5 billion on Upcoming Market Drop
- Thread starter Baron
- Start date
https://www.portfoliovisualizer.com...nchmark=VFINX&symbol1=VFINX&allocation1_1=100
The numbers shows it works if just buy and hold
At the same time, I think nobody every thought that interest rates could be so low for so long. At this stage, I don't think anyone can put together a logical scenario for how they can ever go back again to a historical average, which is lets say about 6%.
Now of course maybe there might be a future bout of inflation down the road and some FED chairman will actually drastically raise them, but I think we can all conclude that if that ever happens, the world is fucked no matter what. So I think its safe to say that interest rates going forward, for at least 5 or 10 years will be at these historical lows, which is way below average. And if interest rates can be far below average for an extended period, then maybe the idea that the market can only ever rise could also be in doubt. Perhaps the next 20 years we will be locked in sideways action.
Now of course if we have sideways action for 20 years, then how on earth will all the pension funds survive? I saw a great talk at Real Vision about how these funds need 7% every year. So if the markets don't go up, then they are in serious trouble.
So I find it hard to believe that given the environment that we are in, the idea that the market will always go up isn't open to breaking down. Something will have to crack. The market cannot always go up, and real estate cannot always go up, etc. Since interest rates are entering a paradigm shift, what else will shift and establish a new norm?
When the trade war is over. You have to remember that Trump is a loose cannon. A bad Big Mac, and he could fire-off some tariff tirade that will destroy the rally. Like, "I am banning all imports from China".
Remember the taste of that Hitler shit when he tweeted that he "ordered all companies to stop doing business with China"? How did the markets do that day, or week? Hmm?
The new paradigm is that old paradigms are toast. And yes, stock markets and real estate cannot be automatically appreciating assets.
Japan has had negative interest rates for going on seven years - and this isn’t the first time that the BoJ maintained a protracted period of negative rates.
The Fed has no choice, really - Draghi has been using negative rates as a EU trade weapon against the Dollar. In a global economy, it’s suicide to maintain interest rates three or four points above your global competitors.
If they’ve chosen their portfolio long equity names wisely they can make money even if the S&P rally continues. 
Ideally what I would do, were I a robust folk, is I would go
1. long VX Dec, and short December NQ.
To counter it, I would
2. short VX Jan and long March NQ.
Once Trump makes his decision I would just cancel the losing legs and let the others resolve.
Number 1, long VX and short NQ seems to have the best potential, based on the history of frumpy. If that were to be the case (Trump signs the bill and causes chaos), the number 2 would be an easy closing, in my head.
1. long VX Dec, and short December NQ.
To counter it, I would
2. short VX Jan and long March NQ.
Once Trump makes his decision I would just cancel the losing legs and let the others resolve.
Number 1, long VX and short NQ seems to have the best potential, based on the history of frumpy. If that were to be the case (Trump signs the bill and causes chaos), the number 2 would be an easy closing, in my head.
