BO29: Trend Following vs Buy & Hold

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 5 March 2020

⏱️ 6 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Want to know what the real benefit of Trend Following is, compared to the traditional Buy & Hold method? Find out in today’s episode…there may be more benefits than meets the eye at first glance.

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

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And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.

Learn more about the Trend Barometer here.

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PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:

1. eBooks that cover key topics that you need to know about

In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here

2. Daily Trend Barometer and Market Score

One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here

3. Other Resources that can help you

And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here

Transcript

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0:00.0	I read a lot of articles, of course, that talk about adding diversification to a portfolio.
0:08.0	And you mentioned earlier commodities.
0:11.0	Right.
0:12.0	And it's difficult for this, when I see this analysis, it's difficult for the commodity or basket
0:20.0	to be included in a portfolio because the assumption is it's going to be
0:25.5	a buy and hold. So what the trend followers, CTA, diversified trend followers do is they can add
0:33.8	markets to a portfolio that are not good as buy and hold.
0:39.0	And where traditionally the analysis is, how does gold do?
0:42.5	Well, I'm talking buy and hold, of course.
0:45.0	Well, they may not do that great.
0:46.4	So you may say, well, there's a real lost opportunity here if I invest in some gold or corn
0:51.1	or soybeans or commodities or crude.
0:54.9	And I prefer the 60-40 then.
0:57.7	And what we're seeing is that that's true.
1:00.3	If you want to add some of these crazy commodities and part exchange into your portfolio,
1:05.8	you must use trend following in order to expect it to add diversification plus actually add to performance.
1:15.1	And I think, and then of course you mentioned shorts, and that's a great secret that people
1:22.4	should not shy away from shorts, regardless of what I said five minutes ago. They add diversification.
1:28.8	They can't make money.
1:30.9	And then that's pretty much totally the, you're going to get that totally from CTAs
1:36.0	and almost nowhere else, the short corn, short coffee, short soybeans that we have on now.
1:42.7	And so CTAs can safely and profitably put some of these other markets in a portfolio,
	...

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