Wall Street often teaches us that we should invest for the long-term. A frequent theme they preach is that we should Buy-and-Hold and simply ride out the ups and downs of the stock market. But who benefits most for this overly simple approach: Wall Street firms, or you, the individual investor?
The secret to answering this question is to look at what Wall Street actually does with their own money.
Wall Street firms actively trade stocks for their own firm’s profits. It is estimated that 75% of NYSE trades are alternative computer-generated Algorithm trades.
Alternative Computer Generated Investments
These computer-generated trades follow the momentum of the stock market, not the fundamental and often flawed projections of what Wall Street analysts say a stock might do in the future. The focus is on what is happening right now, in real time—the actual momentum of the stock market.
So, which would you prefer driving your investments and future wealth, a Wall Street analyst—no better than a fortune teller? Or would you rather trust a sophisticated, and proven computer algorithm to make trades and profits by frequently judging only what the next few days or weeks movements might be?
Where is the bigger opportunity? Traditional buy-and-hold, or more active trading algorithms?
As shown in my book, The Wealth Conspiracy, in the past two decades the stock market was declining or recovering from a decline, 78% of the time. How can holding through these long declines be wise? Instead, your goal should be to avoid the declines instead of suffering through them?
Alternative Momentum Following Algorithms
Computers following momentum may be able to more rapidly detect and react to market trends including detecting declining trends than humans. Computer trading has the ability to frequently, and briefly, move to cash or other investments, when downward momentum is detected. This may potentially help avoid some losses. Plus, computers monitoring up trends may detect opportunities.
I am not suggesting day trading. I am suggesting you capture shorter term momentum trades of a few days or weeks.
Few individuals accomplish this on their own, but with computers following momentum trends, you may capture many of the short term up trends while avoiding many of the market’s declines. And even benefit from these declines by using inverse investments.
You can learn how to get access to a few of these computer-generated, momentum-following algorithmic systems which the Wall Street big Kahunas hoard for themselves.
Develop a plan for yourself! Learn how to play with the BIG DOGS on Wall Street. Go to the Calendley.com calendar link below to schedule an appointment with Curtis Hill, the author of this web site using the link below.