When I started Investing in 2008 everyone was talking about Warren Buffett and Value - Investing. It seemed like a never-ending-inefficiency of the Stock Market that stocks with low PE-Ratios had better returns in the future. The historical data was so clearly for so many countries that even many of the most scientific authors in this time adviced their Readers to buy Value-Stocks (MSCI World Value f.e.). It happend the way it had to: MSCI World Value underperformt the Market in the last ten years. Like so often Market Anomalies perish. What I'm currently asking myself is: "How much more popular strategies do I follow?" Here they are: 1. Investing in Small Caps 2. Buy after a Market-Dropdown (like now) no matter if there are good reasons 3. Buying stocks at all - and expect a higher return 4. Buy fallen angels (Current example: Apple) 5. Bullish on IT, Digitalization & Emerging Markets 6. Passive Investment-Vehicles only 7. Expect major currencies to stay in there historical corridor and buy when they are historically "cheap" 8. Totally dismiss crypto currencies Could this be the new mistakes of an average private Investor like me for the next decade? Which influence do these think-patterns have to the Market at all?
I feel your pain.... I take the approach to invest in stocks that display a high rank of value, momentum and safety. I check their ranking daily. These values change daily and all the stocks and ETF's are running a race with each other, including inverse ETF's. This comparative approach as to ranking will always identify where your exposure could be as the Stocks with this criteria will bubble to the top, no matter if your in a bear or bull market. When scanning this universe you can also identify when a 'turn" is about to happen....You will need to accept that its not just buy and hold...You need holdings that are in momentum mode that display a reasonable value that have enough of a track record to gauge safety. It may be a buy....then sell...then you could rebuy...when momentum returns...or it could be a buy...then take profit...to never return. You need to be where the momentum is (long or short) to outperform. Numbers do not lie. Face it..Earnings and earning expectations drive the market. As you know Investing is a long term approach to macro events. It's those mini events that can cause bad decisions.
