Here is the reality: I do not have a crystal ball (if I did, I would be on a beach somewhere). I did not foresee the pandemic crash in 2020, and I certainly did not anticipate the wild rollercoaster of 2021-2022 that rattled some of our positions. Let us not forget the latest surprise which caught me off-guard – China’s massive stimulus.
The Chinese action jolted the markets around the world and sent most of our leveraged positions sharply higher in our model trading portfolio. I know, I know. With a cumulative return of over +380% so far this year, some people are wondering if it is all too good to be true. Spoiler alert: it is not!
Some of these trades are so volatile they might just send your blood pressure soaring. If you are considering diving in, you will need proof of low blood pressure certified by a medical doctor. This portfolio is not for the faint of heart.
Well, modern markets are not what they used to be. With over USD8 trillion invested in ETFs and 90% of trading volume now driven by algorithms, the game has completely changed. We do not need to toss out the old playbook but we do need to expect the unexpected. Some trades can rebound just as fast if not faster than they dropped when the recovery comes.
Over the last couple of days, I have answered some questions and I have noticed some investors seem to be putting way too much weight on who said what and when like they are tracking market gossip instead of actual trends. Also, they seem to obsess over where the “weak” US dollar is heading against their local currency.
The future is where the money is. I believe there are some long-term opportunities on our radar right now that could make those investors who are more risk averse smile. Sure, short-term portfolio turbulence can be nerve-wracking, but successful investing? That takes patience, fortitude, and daily meditation because sometimes the markets are going to test your emotions.