Tag Archives: passive investing
While many enjoy blasting market timing, very few admit passive investors face high risks. In fact, Monte Carlo simulations show that passive investors in S&P 500 face 50% drawdown with 50% chance. For small caps investors this risk increases to … Continue reading
The conflict about over-fitted market timing strategies versus passive investing has more to do with marketing and sales than with sound quantitative analysis. It appears that the main objective of this conflict is to calm passive investors and discourage market … Continue reading
Many of us who were trend-followers in the 1990s find the current notion of equity trend-following sort of peculiar, if not amusing, due to hindsight bias effect.
Six months are not responsible for all gains in stock market since 2000. This conclusion in some articles was based on the wrong choice of returns. The correct number is about 32.
Another distortion, courtesy of the low interest rate policy of the Fed, that is now way overextended and serves political goals is the “do nothing fund management.” Market timers are being replaced by accountants because fund management boards think the … Continue reading