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Technical analysis is mostly useless for the kind of services financial advisors provide - namely long-term investing. Example: If, at some point, the advisor
by jazzyk 11y ago
Technical analysis is mostly useless for the kind of services financial advisors provide - namely long-term investing.
Example: If, at some point, the advisor looking at Google, which just spiked 10% from $80 to $88/share, passed it over, he did his client a huge disservice, because the stock is at $600/share, say 10 years later.
Technical analysis may be somewhat useful in short-term trading (speculating, rather), but its overall value has been way overblown.
For more sophisticated investing, you need a multi-factor model - a mixture of fundamental analysis, industry/macro indicators, and (perhaps) a touch of technical analysis.
- meeper16 11y agoI agree, combining TA with Sharpe Ratios for example. I've also protected portfolios from showing close to zero gains by using basic stats and TA principles available to anyone, to avoid creating positions in overbought stocks. While also sometimes overweighting on stocks that they are keen on buying, that have either spiked down or have shown significant retracement, oversold, days before.