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Timing absolutely doesn't work in my experience. This effectively makes many forms of derivative instrument worthless to me. There are only a few targeted situa
by bob1029 3y ago
Timing absolutely doesn't work in my experience. This effectively makes many forms of derivative instrument worthless to me. There are only a few targeted situations where I believe something might happen within a certain window, but I absolutely wouldn't bet more than 1-2% of my portfolio on anything with time decay attached to it.
What works better for me is joining in on earnings calls and reviewing presentation materials. Getting a sense for product roadmap, markets, competition, etc. This is the space where you can actually develop meaningful hypotheses regarding what might happen. Those who are performing time series astrology likely do not have the patience to go about things this way.
If you don't have time to spend about a day per quarter reviewing your portfolio, then you probably shouldn't be playing in traffic with individual stock picks, much less options contracts. If you think this is an unreasonable amount of time to spend playing investor, then perhaps you should just buy a little bit of something like $QQQ every day and focus on those other parts of life that are clearly more important to you.
Or, just contribute max to your 401k and close that distracting Robinhood account. Most people would do better over the long haul if they followed that bit of advice. Monkey brain is much more dangerous than losing a few % APY to fund management fees and sub-par allocations.
- Arainach 3y ago>Monkey brain is much more dangerous than losing a few % APY ....and you don't even need a few percent to throw it in a target date fund that regularly rebalances for you
- satvikpendem 3y agoTarget date funds usually do worse than throwing everything into VTI and holding for 30 years.
- voidfunc 3y agoIsn't that expected because of the automatic re-balancing to minimize risk? I don't think anyone goes with target date funds thinking they are going to maximize returns because it's a tool to buy and forget.
- satvikpendem 3y agoBut buying VTI is also a tool to buy and forget and it maximizes returns compared to target date funds. They're lower due to fees as well as investing too much into bonds when young when it's not necessary, one should invest in bonds when closer to retirement instead.
- bartwr 3y agoI keep telling my friends who get really into stock investment, read some stuff, invent strategies - and end up much worse (sometimes losing money) than me just dumping everything into a few almost random indices: 1. Greed (not as a pejorative or a judgmental term, just this itchy feeling that you want more than you have even if you gain and are not satisfied) is the fastest way to lose money, whether through a poor investment or being scammed. 2. When you decide to play a game of stock investment, who are you playing it against? Being better than average (just market returns) means being better than the average (not median!) player, who in this case is some institutional investor. Do they really think that with a few online courses they can be consistently better than people who do this stuff for a living?
- jraby3 3y agoQQQ went like 17 years from its 2001 high till it made it back to the same price. S&P is probably less stressful for the type of investor you are talking about.
- wolverine876 3y ago> This effectively makes many forms of derivative instrument worthless to me. Derivatives have another, much more valuable use: They enable you to hedge your investment, essentially insurance. For example, if you invest heavily in agriculture in Iowa, you might buy derivatives tied to the weather and to the price of whatever you grow - derivatives that pay if those things go bad. You lose a little if things go well, but that's just the cost of insurance. Similarly, if you invest heavily in electric vehicles, you might by a derivative tied to the price of key inputs, such as metals for batteries.