willthrill81 wrote: ↑
Thu May 23, 2019 8:05 pm
That anyone would believe that my strategy is riskier than a buy-and-hold strategy of 100% stock is beyond incredible to me
Your strategy might indeed be riskier than buy-an-hold. Why is that thought incredible?
So far, buy and hold has worked because the U.S. markets have always bounced back and gone higher.
You seem fixated on maximum drawdown, but it doesn't matter in accumulation phase if the market recovers and goes higher in the long run.
Remember, the 10% long-term return from the U.S. stock market INCLUDES the crashes.
I don't see why you're so excited about getting out early. Following the market all the way down and back up again has been a winning strategy.
Now, you're following a trend following strategy that ALSO has worked in the past. So far.
But which is riskier? Which thought has the most risk of being wrong in the FUTURE?
The thought that the U.S. stock market goes up in the long run?
Or the thought that the next big crash will be slow enough and/or preceded by unemployment numbers in time for you to get out in a timely manner AND the recovery will be slow enough and/or unemployment numbers will rebound fast enough in time for you to get back in quick enough to make some good money AND that when that happens it will be a big enough gain to overcome all the small losses from all the preceding whipsaws?
Which thought is riskier?
Is it really incredible to you to think that the first thought is less risky? Or at least the two thoughts are the same risk level? Do you really think your plan is so obviously inherently less risky, that it's incredible that anyone would think just buy and holding is the less risky plan?