FYI: A few years back, in the aftermath of the Great Financial Crisis, there was a twitter clown running around screaming about the need for individual investors to be shorting the market and placing trades all day in order to “manage risk.” In hindsight, this was obviously ridiculous advice at the time and it almost certainly would have led to horrendous performance from anyone attempting to follow it with their long-term investable assets.
Buying and selling all day in response to a random mix of macro data and individual stock fundamentals is a nice way to crush your portfolio’s value while simultaneously paying thousands of dollars to Interactive Brokers and the IRS. Referring to it as “risk management” is a nice way to make yourself feel better.
The guy’s still out there, I’m told, but no one is paying attention to him anymore.
Anyway…
Regards,
Ted
http://thereformedbroker.com/2018/04/10/managing-risk-is-not-the-same-as-taking-less-risk/
