Reflections on Actively Trading in the Stock Market for a Year

What this fails to consider is what the market has been doing regardless of his/her actions.

Those who make gains when the market is tanking is who I want to hear from.

I think it's better to look for people who consistently make money on the back of comprehensible strategies where you understand the risks and failure modes. It's easy to find people who make money when the market goes down - wallstreetbets is full of people who buy puts, or maybe the market in general tanks but your specific lottery tickets pay out.

I'm much more interested in someone who can articulate a strategy that I can understand and that has a good track record.

> who can articulate a strategy that I can understand and that has a good track record.

i wouldn't care for articulating the strategy, if they have a great track record (something like 20 years of positive returns for example).

If they can't articulate a strategy that you can understand then you run the risk that:

A) It's a scam. Their strategy actually relies on dupes doing what they say while they do something different to profit off of the loss of their dupes.

B) It's luck. With many people investing, and the market generally moving up, some of them will have good returns over time even without a good strategy. The problem here is you can do exactly what they say and it may not work.

C) It's defunct. Maybe they had some plan that worked really well 20 years ago and the efficacy of the strategy has been declining. Or, as whoever it is reveals their strategy to you others see, understand, and compensate for the strategy and it stops working because of that.

If you can understand the strategy then you can account for these risks and/or determine that they do not apply.

If they can't articulate a strategy that you can understand then you run the risk that:

A) It's a scam. Their strategy actually relies on dupes doing what they say while they do something different to profit off of the loss of their dupes.

B) It's luck. With many people investing, and the market generally moving up, some of them will have good returns over time even without a good strategy. The problem here is you can do exactly what they say and it may not work.

C) It's defunct. Maybe they had some plan that worked really well 20 years ago and the efficacy of the strategy has been declining. Or, as whoever it is reveals their strategy to you others see, understand, and compensate for the strategy and it stops working because of that.

If you can understand the strategy then you can account for these risks and/or determine that they do not apply.

No one with a working strategy is going to describe it to you. It would dilute the strategy's effectiveness. The nature of the market is that any edge that becomes public knowledge soon stops working.

I would recommend value investing. Read some books on the topic. We have been in a fairly unprecidented bull market. The S&P 500 is up nearly 30 percent on the year. You would have almost had to try to lose money in this market. Where strategies prove themselves or not are in a bear market.

Further, the most important attribute in investing is temperment. If you find yourself making decisions based on emotions then just invest in a low cost index fund. You will beat 50 percent of investors over the long term.

Well written article. The drawbacks to active investing mentioned mirror my own experience. I ended up with a constant nagging in my head to know how the market was doing. Since moving back to a buy and hold strategy I feel happier and more focussed on the rest of my life.

I appreciate the level-headedness of this writeup.