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It's very simple, the best strategy for the last 20 years (with hindsight) would be to buy the shares that have performed best over this period, but it wouldn't
by Grustaf 5y ago
It's very simple, the best strategy for the last 20 years (with hindsight) would be to buy the shares that have performed best over this period, but it wouldn't work better than chance going forward.
Obviously, sitting down and creating that "strategy" would be silly, nobody would think that would work. But if you're using ML or just test a million random strategies, you could end up with something along those lines, a strategy that is optimised for the particular paths stock prices took up to know.
- teachingassist 5y ago> the best strategy for the last 20 years (with hindsight) would be to buy the shares that have performed best over this period, The best strategy doesn't seem to me to be straightforward to calculate, even with perfect hindsight. It might be to continually switch in the short-term most profitable asset, after taking into account the transaction costs and risks of influencing the market.
- Grustaf 5y agoSure, it's just an example. Let's say you're looking for the best buy and hold strategy then, the point is that what you actually want in the future is a strategy that doesn't depend on the particular circumstances in the preceding 20 years.