Lie: One Method Magically Works In All Markets
One of the lies financial wizards spread among the community of investors is that there is one, magic, secret method that works in all markets, at all times.
And guess who holds that magic, secret, and, apparently, proprietary method? That’s exactly right, the financial wizards do.
During some investment eras, during precise market conditions, that method may spin off amazing returns. But, when conditions change, the financial wizard’s magic wand suddenly loses its power.
Many financial wizards are one trick ponies who believe that a certain investment style or strategy masters all markets. They think that their special brand of Value Investing works in all conditions, for instance. They believe in momentum trading. They only pick stocks moving above their 60-day average. Or 30-day average. Or 23.5 day average. They look for candlesticks, or double bottoms.
But, the market, I believe, is a group-driven organism and, while there are patterns that develop, those patterns move and evolve. It’s difficult to find a constant. It’s almost impossible for a big bureaucracy to find patterns and act on them.
If the market is an organism, rather than a static chart, then the individual investor has advantages. He or she can remain nimble, looking for those kaleidoscopic patterns to emerge.
There are other possibilities developing in the exponentially exploding world of technology. We, at Online Investing AI, are trying to use artificial intelligence Automated Trading systems that can understand strategy changes.
This is the fourth post in a series about lies financial wizards want investors to believe. For more information, you might want to read the third post in this series. It’s called Lie:It Takes Too Much Time And Effort To Manage A Portfolio.
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Related posts:
- Seven Lies Financial Wizards Want Investors To Believe
- Lie: Investors Can Only Make Money When The Economy Is Good
- Lie: You Can Arrive At Financial Freedom Using A Rear View Mirror
- Lie: The Market Is Too Complex For Regular Investors To Understand
- Lie: It Takes Too Much Time And Effort To Manage A Portfolio
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
