You still don't get it, let me spell it for you: When professionals in this market with years of training and work experience invested tons of money and time in their education and training then it is because some newbie indicators, overlaid with couple filters and buy and sell rules do not provide value-added. Everyone would be using them if they proved worthwhile. It is ok to challenge the status quo but if something completely goes against logic and common sense then maybe it should be questioned and taken for what it is, nearly worthless. I used professional bank traders as example. Hope this makes it clear now.
Can It Be This Simple? S&P 500
- Thread starter systematictrader
- Start date
And many hedge funds do. Those who trade derivatives and only focus on trading risk associated with derivatives often times are career profitable and make money for their firms, banks or hedge funds or central banks. The problem here is that their performance does not really impact hedge funds' bottom line: (a) many of the derivative strategies and trading approaches are not infinitely scalable, however many hedge funds need to place way more money than can be employed in derivatives trading alone which leads me to (b) the big chunk of hedge fund money is not traded, it is invested. In essence many hedge fund portfolios more closely resemble a buy side fund than a trading book. The difference between a hedge fund and a public buy side fund is (1) less scrutiny, (2) more choices how to invest, to short or go completely into cash (whereas many public funds cannot go into cash >x%), (3) more insider knowledge (whether obtained legally or illegally), ...my point here is despite the higher flexibility of how to invest for hedge funds, their performance more closely resembles the one of buy and hold funds simply because most of the investments are bought and held. It is because of the huge amount of AUM that needs to be placed in large hedge funds. Some derivatives traders in their teams that make 5,10 , 20, 50, 100 millions hardly make a dent in the overall p&l.
Good work on contributing to your retirement !
Technical analysis can be coined "visual intuition".
It may be much easier to to use academically and empirically derived, "non intuitive" strategies using capital asset pricing model ( CAPM ) factors and "tactical" factors.
As the ETF space has evolved over the past 5 - 10 years, there are many products that are constructed with these underlying factors in mind.
Allowing the highest alpha producing assets to compound over long time periods with infrequent tactical transactions ( 8.5 per decade in the case below ) may be the way to go.
Maximize the best, minimize the rest ..
tinyurl.com/znnqxdw ( paste into browser address bar )
- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of the world's economies work for you
Technical analysis can be coined "visual intuition".
It may be much easier to to use academically and empirically derived, "non intuitive" strategies using capital asset pricing model ( CAPM ) factors and "tactical" factors.
As the ETF space has evolved over the past 5 - 10 years, there are many products that are constructed with these underlying factors in mind.
Allowing the highest alpha producing assets to compound over long time periods with infrequent tactical transactions ( 8.5 per decade in the case below ) may be the way to go.
Maximize the best, minimize the rest ..
tinyurl.com/znnqxdw ( paste into browser address bar )
- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of the world's economies work for you
%%
Sure could be; but seldom is--- because the future does not repeat like the past. But lower vol could be helpful, the closer you get to age 77/+ I like your plan better than the cash investor , one that said i am expecting a crash since 2008; since 2008 was a bear market, not a crash.
at its most basic form, this will at least have me out during sharp drops assuming they dont take place ultra rapid, 1987 for example, iam also supplementing this with simply an elementary idea of the fact that if iam out lets say NOT near the top but well below the top and i suffer a loss then say iam out and we continue to drop for a year or so similar to 08 or 02 where the market is much lower, i could count on that although iam out, i can have cash contributions continue to buy at lower prices even though the MACD is still below zero, so two things iam leveraging here, my age and the fact i have a long time, and my heavy contributions (2k a month) on monthly basis in comparison with my age which can accelerate the averaging down/timing process
if u dont mind me asking, what the difference from ur view in a crash or a bear market? cant they take place together sometimes? is 1987 considered a crash for u??? i know some people who considered that a crash but not a bear market due to its duration being not too long
thank u
Yes,sysTrader good point on 1987 crash, due to its sharpness,%% drop in OCT, finish up for year, for most indexes.Typical bear, like 2008 lasts longer ; SPY is most all below 12 month moving average for all of 2008, bear market or 3 years 2000.Wisdom is profitable to direct
I'll never forget the first time I "discovered" the moving average crossover. Then I heard about this guy...
https://en.wikipedia.org/wiki/Richard_Donchian
To the OP: You have an edge that I no longer have....TIME. Put the bulk of your funds in a blue chip index. Dollar cost average on your buys. Do that no matter what the market is doing.
What happens is after many years, the dollar amount of your returns will go parabolic....instead on making a 5-7% return on $10k or $20, you will be making that return on $500k+...do the math.
An index will always return a positive amount over a long period. Why you ask? because an index is always re-balanced to get rid of the laggards and add the new winners.
https://en.wikipedia.org/wiki/Richard_Donchian
To the OP: You have an edge that I no longer have....TIME. Put the bulk of your funds in a blue chip index. Dollar cost average on your buys. Do that no matter what the market is doing.
What happens is after many years, the dollar amount of your returns will go parabolic....instead on making a 5-7% return on $10k or $20, you will be making that return on $500k+...do the math.
An index will always return a positive amount over a long period. Why you ask? because an index is always re-balanced to get rid of the laggards and add the new winners.
Yes i believe and i have done the math, and its the reason i invest viciously and max out the contributions to 2k a month,
Thats the edge i make sure i leverage now while i have it the time element and the human capital; future earnings and income yet to be realized
I genuinly believe its easy to outperform
The average person and the market when it comes to investing, INVESTING, simple
Discpline, patience and a long term plan, at its most basic form simply stepping up contributions more when markets drop, and even more contributions when the market drops further