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Also what did it take to become a first year analyst
How is this no risk? Your investment could easily move in the other direction during any given timeframe. Statistically speaking, a ton of short term investments is riskier than buying and holding for the long term.
okay true but but if historical volatility for a stock or etf is 1 percent daily you could lock in market change before close easily during a bull market. Also if you invest in undervalued stocks then on the path to fair price you can sell when positive. I understand there is risk. What I mean is that when the money is out of the market it cannot lose or gain any making the only risk inflation. So I could hold a stock for 1 minute after open one hour or 3 weeks whenever it hits 1 percent gain I sell then wait until next month. Also I know it is not reliable I just want to see the flaws of this idea.
The flaws of this idea is that you will lose out against a passive strategy especially after you consider transaction costs. If it were that easy to do, everyone would do it and arbitrage the market such that the price reflects all known information....oh wait, that's actually the market.
thank you, not to be oblivious or unintelligent but could you explain your sarcams I cant tell if your saying look investing in things based on math is good but the price change is not because its undervalued but because people see its "undervalued" and buy it and that range people are willing to spend while still undervalued is what makes the price of the security higher.
thank you
Do it in a triple leveraged ETF like TQQQ and it could be 36% annually, don't think small. Write back in a year and post gains.
What the others are trying to say is that while this seems easy to do, you can also very easily fuck up your timing. There are other elements like once you start you will inevitably go through an over-trading rabbit hole, with the thought that you're doing hot and cant miss, start ignoring your timing, chasing individual equities, etc.
I would honestly say try it with SPY, you might be good at it and have success, but inevitably you will live through a day when the Fed (me) finally announces that they are raising interest rates, stopping QE, etc. and you'll see your account drop 3-5% in minutes, if you can live with that and continue its fine, all a personal choice.
And I always think it's funny how everyone always talks about "no active trader can beat the market over the long term," like okay dumb dumb explain why your bank has literally billions of dollars at risk in active trading?
Ya I agree with the bank part lol but on a side note a TQQQ is a ETP and meant to be traded intra day bc they reprice it or something every month or so. Something called volatility drag means long term you lose out while the actual etf could be doing quite well.
I understand the math behind the volatility drag but here's another simplistic argument:
Show me the drag? 1200% in 5 yrs compared to 103% for SPY. It's just a term for Bloggers use on seeking alpha to write click bait articles and appear intelligent - thinking of volatility drag as a portfolio risk is the same thing as saying "I believe that the S&P500 is going to move up and down 1% every day for the duration of my investment horizon" definitely possible to have sideways movement over a period but I think TQQQ is actually a very safe investment.
None of this is supposed to come off as rude/argumentative by the way, I'm angry at the bloggers not at you.
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