Why Even a Crystal Ball Won’t Make You Rich
Imagine having tomorrow’s news today. Would you use it to strike it rich in the markets? That’s the premise behind a fascinating experiment conducted by Victor Haghani, James White, and Jerry Bell, described in their article “When a Crystal Ball Isn’t Enough to Make...
Why Retail Investors and Traders Lose Money
Why Most Retail Investors Lose Money Most retail investors – everyday individuals trading stocks and other assets – end up losing money or underperforming the market. Various analyses worldwide confirm this trend. For example, regulators in Europe found that 74–89% of...
Portfolio Hedging: An Overview for Investors
Introduction Stock market downturns are a regular occurrence, and they are part of every investor’s experience over time. Exposure to risk is what generates long-term returns—but it also requires investors to accept periods of volatility and temporary losses. This...
Volatility and Returns
Should you worry about the volatility of asset returns as a long-term investor? Yes, you should, because it will cost you money over time. People tend to only look at arithmetic returns of an investment, meaning the return in a specific period. Instead, investors...
Do you gamble?
Many people lost lots of money in the past “investing” too much of their money into perceived lucrative opportunities. Think Gamestop. During the GameStop short squeeze in early 2021, many retail investors rushed to buy GME shares as the stock price soared due to the...
Do You Want To Be Wealthy Or Just Rich?
Exploring the True Meaning of Wealth When most people think of wealth, the first thing that comes to mind is money - being rich, having a large bank balance, owning properties, or being able to afford luxury goods. However, while being rich typically refers to one's...
Getting Started: A Basic Risk Premia Portfolio
Part 1: Recap of Risk Premia Harvesting As described in a previous post, Risk Premia Harvesting is a very accessible trading strategy for any retail investor and does not require a lot of effort to get going and keep going. As highlighted there, the most important...
Leverage
Leverage is a powerful tool in both investing and trading, allowing individuals and institutions to amplify their potential returns by borrowing money or using other financial instruments. When used wisely, leverage can significantly enhance profits. However, it also...
Bayes Reasoning
Bayes’ reasoning is a powerful tool for decision-making under uncertainty. It’s used not just in statistics but also in various fields like medicine, artificial intelligence, economics, and investing. The crux of Bayes' reasoning is updating your prior beliefs as new...
Market Timing
Investing in the stock market can be an exciting and daunting task. One of the most debated strategies within the world of investing is market timing – an approach where investors try to predict future market movements in order to buy before prices rise and sell...
Disclaimer
I am not a qualified licensed investment advisor but a private retail investor with a broader interest in financial literacy. All information and content provided here, including any thoughts and ideas, opinions, forecasts and predictions, suggestions, or investment picks expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies.
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