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I know, anything even remotely non-permabull is nuked for bad feels about The Strongest Economy In Years. Alright, as a fellow traveller, let me help you. I'm
by carsongross 11y ago
I know, anything even remotely non-permabull is nuked for bad feels about The Strongest Economy In Years.
Alright, as a fellow traveller, let me help you. I'm going to make some observations and then give you my magic key to dealing with this market:
- Picking individual stocks is very difficult unless you are Buffett-tier
- The low-cost index funders have a very strong argument
- That being said, there are obvious long term momentum trends in the broad market, the efficient market guys are a joke
- Daily and even weekly movements have too much noise to be worth looking at
- Monthly is actually pretty good though
- Sitting in cash for any extended period is almost impossible for most investors and flat out impossible for funds (competitive advantage alert!)
So, putting that all together, you have the following thought:
"What if do index investing and I use momentum measurements of the broad market on a monthly basis to try to avoid the shit-show pullbacks."
I use the monthly MACD of the S&P 500, and it has worked very well: invest when MACD is positive, get more conservative as it goes to zero, start selling when it goes negative, sit in cash and wait for the faster moving average to reverse on a monthly basis.
No one believes me, and you shouldn't either. But there it is.