One of the best posts I have ever read on trading and investment:
It has taken me a long, long time to recognise the truths described in this article. The real point is that:
Finance is not a science
You do NOT have to be a scientist to “get” this point. You DO have to be well read in science for non-scientists. You do need to consider what some would see as almost philosophical points about the nature of the universe and its physical laws.
I am neither a mathematician or scientist. But endless work and endless study in a top down sense has made me realise the true wisdom of what this Mathematical Investor website provides. Very good commonsense advice that the vast majority of financial markets players really, really need to grasp.
Very few of them ever will. And the scam artists are mostly too dumb to understand anyway.
Which leads me right back to thumping on about asset allocation. Fancy schemes are doomed to failure. Diversification and simple re-balancing rules are probably all that will hold good in the long term. Even then….empires and species rise and fall. Long, long term the human race itself will be fortunate if it even survives – especially bearing in mind over 90% of species which ever existed on earth are now extinct!