If you ask anyone, everyone will have a narrative about how he/she made a kill in any financial investment, be it a stock or share, bond, property, or even in cryptocurrency or ICO.
Ask another question, “Is your networth growing with your investments in time?” Most people will not claim that. Why is it so? Simply said, most people have not made much with their selected investment vehicles or worse still, lost the buck of their capital with time.
Stock market is efficient and self regulating, is an illusion
Past Investment records of retailed investors are not pretty. About 90% had lost money in their selected investment vehicles. About 5-8% of them made some money, but not much. Only 2 to 5% made big bulk of their investments.
What about the performance of professional fund manager/s? A person or group of people responsible for investing a mutual, exchange-traded or closed-end fund’s assets, implementing its investment strategy and managing day-to-day portfolio trading.
According to Vanguard’s “The Case for Indexing Asia” report, persistent outperformance is scarce.
For those investors pursuing an actively managed strategy, the critical question becomes: Which fund will outperform? Most investors approach this question by selecting a winner from the past. Investors cannot profit from a manager’s past success, however, so it is important to ask, Does a winning manager’s past performance persist into the future? Academics have long studied whether past performance can accurately predict future performance. The simple answer is “No evidence of persistence in fund outperformance after adjusting for both the well-known Fama-French (1993) three-factor model as well as momentum.
Most people who dabble in financial investments will hear or know about long term successful investor like Warren Buffet of Berkshire Hathaway fame, successful hedge fund manager Ray Dalio or George Soros who brought the Bank of England to its knees. In George Soros’s case, he shorted the British pounds In “Black Wednesday” and in the process, pocketed over a billion dollars in 1992. Could you apply their strategies wholesale in your own situations? The answer is a definitely “No!”
So, what then, can a retailed investors like you and me do? We don’t want to wait for a long time to know that our investment philosophy and investment strategies are not the most suitable ones for our retirement plan.
Fortunately, we had someone who had walked the path, to give a hawk eye view of what can be done to pursue our own financial investment success. He is Anton Kreil, a former professional trader who was appointed as the manager of the group, Million Dollar Traders, a 2009 British reality television series devised by hedge fund manager Lex van Dam. He shared his thought in an investment event, of a blueprint, a time frame of 1-3 months, to finding out whether you have the qualities of being a successful trader/investor.
His “mandate” for his team members are as follow:-
Approach systematic long/short portfolio
Risk diversity & risk management
Return long term profitability consistently
Outcome capital preservation and growth.
According to him, all the above, if done it correctly in the stated time frame, could give a person, the confidence to embark on his/her investment journey with reasonable financial success.
In my future posts, I’ll discuss on the above in more details. All suggestions are of my own and not financial advices.
If possible, the proposed strategies are being supported from reseach studies from recognised financial/academic institutions.
