Have the record number of investors in the stock market lost their minds?

Re:Have the record number of investors in the stock market l... by deevolution on Saturday May 16, 2020 @11:28AM (#23204181)

I suggest taking a look at the dragon portfolio

https://taylorpearson.me/thedragon/

The basic idea is that you create a balanced portfolio of assets that are negatively correlated with each other so that, over a very long time horizon , your wealth retains its value even in the face of uncertainty, black swan events, and volatility. An example would be owning an equal proportion of stock, cash, bitcoin, gold, fixed income, commodities, and volatility. (Harder for the average person to get exposure to commodities and volatility - but I think bitcoin checks those boxes).

Edit: include original paper that describes the portfolio by Christopher Cole: https://docsend.com/view/taygkbn

[ Parent | on HN ]

Re:Have the record number of investors in the stock market l... by themodelplumber on Saturday May 16, 2020 @12:07PM (#23204602)

Why so risk-averse in the big picture? Just skimming for now, it seems like this could easily lock a person out of huge gains made by e.g. actively trading during a dynamic market event. Which is weird because there are really effective ways to cover risks during such periods as well, only they aren't nearly as deadly to one's overall profit.

It seems like one of the selling points must be "set and forget," which makes me wonder if the target audience is just people who don't want to actively learn about a thing, but would rather take someone else's word.

[ Parent | on HN ]

Re:Have the record number of investors in the stock market l... by shard on Saturday May 16, 2020 @02:26PM (#23205885)

For someone interested in learning about how to cover risk while taking during a dynamic market event, what would you recommend? My investment education pretty much stopped at "A Random Walk Down Wall Street".

[ Parent | on HN ]

Re:Have the record number of investors in the stock market l... by hckrnrd on Saturday May 16, 2020 @02:15PM (#23205799)

A bit more context around “really effective ways to cover risk” would be helpful. Are you referring to derivatives such as covered calls on stocks you already own? Or collecting premium by selling naked puts?

[ Parent | on HN ]

Re:Have the record number of investors in the stock market l... by neural_thing on Saturday May 16, 2020 @11:45AM (#23204347)

At least link the original paper!

Christopher Cole is wicked smart, deserves attribution.

https://docsend.com/view/taygkbn

[ Parent | on HN ]

Re:Have the record number of investors in the stock market l... by atentaten on Saturday May 16, 2020 @12:54PM (#23205073)

Isn't this simply another name for diversification?

[ Parent | on HN ]

Re:Have the record number of investors in the stock market l... by random32840 on Saturday May 16, 2020 @03:15PM (#23206336)

Yes, but it's branded to sell you products and ignores differences in each item's volatility & leverage.

[ Parent | on HN ]

Re:Have the record number of investors in the stock market l... by walshemj on Saturday May 16, 2020 @03:38PM (#23206542)

This is what wealth preservation trusts like Personal Assets, RIT, Brunner and Caledonian do (all listed in London).

[ Parent | on HN ]