Automated Trading and Economic Turmoil
Are we on the verge of economic collapse? Are millions of people going to see their retirement saving dwindle to 20% of of the previous value?
I don’t know. I don’t think anyone can predict the future with perfect accuracy. But I do think we should be prepared for whatever happens in the future. And that includes economic collapse.
Most people just assume that things will continue going the same way as the last few years. They stay at their jobs and try to save money. Financial planners assume that stocks will return 7%. There is just one small problem with this approach. Massive economic depressions happen on average once in a lifetime. It’s been 80 years since the start of the last depression.
Another major factor is that people really don’t remember what the last depression was like. The few people who do remember are quite old. The vast majority of people have no experience of living in an economic depression. And, besides that, most people forget what happened more than a few years ago.
We should all be prepared for the possibility of a massive economic depression. And we believe that Automated Trading is a viable investment vehicle. These systems can buy and sell stocks or other assets depending on the price. So, they do not use the old buy-and-hold approach to investing. The problem with buy-and-hold investing, mutual funds, and even index funds is that as the market goes down, so does our portfolio. In 1929, the market lost nearly 50% in less than 3 months,.
We have see similar losses both last year and in 2000. We will see even bigger losses in the future. We just don’t know when.
That’s why we want to be prepared when it does happen. Artificial intelligence and ever-improving technology is a good solution. These technologies can be used to create Automated Trading systems that sell when the market is going down. Instead of losing money like most people, we can use these systems to make money.
Related posts:
- Automated Trading and Economic Recovery
- Automated Trading Compared to Mutual Funds
- Automated Trading and the Value Investing
- Economic Trends And Automated Trading
- Automated Trading and Index Funds
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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.
