sss555sss wrote:Using technical indicators, it's easy to get into touching your portfolio too many times. Trend breaks are usually very quick and unless managing the portfolio is a full time job, is almost impossible to catch them especially on something like a single stock which could very well tank when everything else in the economy is going well.
I agree. I ran a strategy that combined fundamental & technical analysis (trend following) for a decade or so; once positions were opened they were managed almost exclusively via price action + other behavioural factors. I did this full-time. It was extremely effective
but it was also hugely time consuming, and certainly incompatible with a regular working life/career.
At the same time, it's hard to put say £10,000 in it and leave it because even if it went to £20,000 in 10 years, it could easily be wiped out by some event as shown on the chart.
Effective long term investment normally requires taking a different approach to the one you seem to have in mind, employing
portfolio design based around diversification and asset allocation. These allow your portfolio to become more resilient, lower cost and largely hands-off;
hands-off is good because it requires less input (less time), delivers an easier ride (psychologically), and because for most investors it'll lead to better outcomes - the well known Pogo line
"We have met the enemy and he is us" could well have been written about investors.
It's worth bearing in mind that if you're young (eg. 30), you may be investing for 50+ years, and if you're fortunate you'll likely end up with the majority of your net worth tied up in it. As such, it's worth approaching it as a suitably serious undertaking and giving it plenty of thought. If you've been browsing private investor forums over the past month you'll have read the consequences of what happens when events expose those who didn't take it sufficiently seriously.
If you're numerate as I assume, I'd suggest an early read of William J Bernstein's
"Rational Expectations - Asset Allocation for Investing Adults" would serve you well.
https://www.amazon.co.uk/Rational-Expec ... 00KSPCY24/NB the book isn't as high brow as the publisher's description makes out - don't be out off; and for the UK the USisms need to be translated.
As I said before: if you approach this seriously and form a good plan, you should succeed (it may not always be easy but it should work); but otherwise the chances are it won't work out too well (and/or you'll pay an expensive tuition along the way).
Sounds a bit heavy, I realise, but I think it's true!