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Final Update (Patreon)

Published:
2022-03-11 16:34:27
Imported:
2022-08

Content

Legged out of the trade yesterday for a profit! 

Does anyone else feel like now is a good time to understand actively trading / managing your money? 

Index = Loose mony

Bonds = Loose mony 

Cash = No  

And I know "bUy AnD hOld sToCks fOr liFe aNd DoN't wORry aBoUt THe sHOrt teRm".

But isn't it funny how people will wholeheartedly say that and then sell everything the moment we see 1 month of negative returns?  

I feel like I've realized more and more that sustainability and control / illusion of control is actually equally important to returns (as crazy as that might sound). 

These same mfs saying buy the dip / buy and hold the index are of the generation where doing so has done nothing but print money every single year. 

Looking at the drop off from this most recent correction, I don't believe ANYONE would continue to buy the index during the 13 years between 2000 and 2013 where you wouldn't have returned one penny. 

That's my argument and justification for doing something (actively trading) that has historically had horrible underperformance. 

What do you think? 

Comments

thelingletingle

Too many words. Stock go down, buy more. Stock only go up.

Anonymous

Holding indexes is like stealing candy from a baby. It’s easy and predictable, but the lollipop will not quench your hunger for sugar forever. It’s much more fun attempting to rob a candy store, despite the risk of going to prison forever. The fun of risk>easy money.

Anonymous

The US has been experiencing real GDP growth rate of anywhere between 1-2%/yr for the last 2 decades excluding covid and 2008. If the stock market were a reflection of the economic performance we would not be seeing 10% annualized average return on the SP500. With the end of the QE era and if it is indeed as Ben suggest we are going to move into lateral consolidation, his means reversion based trading strategy would be a winning move. I keep two portfolios, however. One for active trading on means reversion, one passive virgin fund in case I blow it up so my retirement plan isn't going to be sponsored by Remington and Winchester.

blackmagick77

Definitely important to manage your trades. One thing I've read is to check every month if the spy is over or under the 200ema. If it's under, sell and keep in cash until it comes up past it again. The bacltest said if you would have done that even in 2008 you wouldn't have lost that much. I feel its good to have a managed portfolio (I like trading options) and a long term one woth dividends and indexes. The right answer isn't one or the other it seems like the real answer is both