Is Investing About Financial Numbers, Ratios And Back Testing???
If you strongly believe in Method out of 3M's - Method, Mind and Money Management; then in today's advance technology in AI and Robotic investors; you are better able to go with AI and Robotic investors.
You can't beat AI and Robots in analyzing financial numbers, ratios and back testing. They are emotionless and act purely on numbers!
Go with AI Robotic indexing and free you from analyzing too much!
Robo investing is not the holy grail .... at least not yet! Hahaha!
ReplyDeleteInvestors will still experience big drawdowns and long periods of underperformance.
If they don't master the Mind, whatever robo or ratio or backtesting or method will also throw out the window when things become difficult. LOL!
A good Method will have a good Money Mgmt in place. The specific details of the Money Mgmt will depend on the individual liquidity needs, household needs, job security etc.
Besides over-estimating their risk profile during bull times, the other thing that causes investors trouble is under-estimating their money mgmt requirements.
Especially for those who are basing FIRE on being 100% invested in high dividend yield stocks / REITs, just to generate sufficient dividends to cover living expenses.
They get into trouble during bad recessions when dividends are cut (especially in Singapore context), and when companies & REITs come calling with large rights issues to clear debts or shore up balance sheets .... which are yield dilutive.
And this is provided they maintain their presence of mind to not capitulate when they see their entire life savings drop by 50%! LOL!!
May be three classes of FIRE or FIRe: Bronze, silver or Gold. Bronze class will have some worries when Bear market prolongs for more than 2 years.
DeleteDo you mean Long Term Capital?
ReplyDelete