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> This is exactly what not should happen when investing longterm: Being driven by emotions rather than rational facts. Putting a limit on one's potential losse
by adwn 10y ago
> This is exactly what not should happen when investing longterm: Being driven by emotions rather than rational facts.
Putting a limit on one's potential losses is pretty rational, not emotional. Models are not perfect, and you do not want to find yourself with high paper losses when they fail.
Of course, if your models don't work well together with stop-loss limits, then that's a problem.
- binaryanomaly 10y ago> Putting a limit on one's potential losses is pretty rational, not emotional. Models are not perfect, and you do not want to find yourself with high paper losses when they fail. At least here they say that it is not a good idea with a quant approach: http://en.swissquote.com/epb/support/faq#node-301 http://en.swissquote.com/epb/support/faq#node-301 The BlackRock example plus the fact that many ETFs beat managed Funds in terms of performance seem to support the position that human interference is in most cases for the worse.
- ohyes 10y agoBut you do that by properly sizing your positions, not by panic selling.