It's depends ... a Commodity Trading Advisor and futures manager can have a diferrent perspective about it ..so it really doesnot matter if we trade the S&P 500 Index, rough rice, bonds, gold, bitcoin or even live hogs. They are all just futures which can be treated in exactly the same way. Now let's talk about baskets and eggs ..
Bitcoin is the future so let's think as futures managers
; but lazzy as programmers so just lets #incude some lib .h
// Quote from book "Following the Trend: Diversified Managed Futures Trading" by Andreas Clenow (5 starts
)
the most widely held asset class, in particular among the general public, is equities; that is, shares of corporations trading on stock exchanges. The academic community along with most large banks and financial institutions have long told the public that buying and holding equities over long periods of time is a safe and prudent method of investing and this has created a huge market for equity mutual funds. These funds are generally seen as responsible long-term investments that always go up in the long run, and there is a good chance that even a large part of your pension plan is invested in equity mutual funds for that very reason. The ubiquitous advice from banks is that you should hold a combination of equity mutual funds and bond mutual funds and that the younger you are, the larger the weight of the equity funds should be. The reason for the last part is that, although equities do tend to go up in the long run, they are more volatile than bonds and you should take higher financial risks when you are younger since you have time to make your losses back. Furthermore, the advice is generally that you should prefer equity mutual funds over buying single stocks to make sure that you get sufficient diversification and you participate in the overall market instead of taking bets on individual companies which may run into unexpected trouble down the road.
historical data
Then again, if stocks always go up in the long run the correlations should be of lesser importance since you would always make the money back again if you just sit on the stocks and wait a little bit longer. This is absolutely true and if you are a very patient person you are very likely to make money from the stock markets by just buying and holding. From 1976 to 2011 the MSCI World Index rose by 1,300%, so in 35 years you would have made over ten times your initial investment. Of course, if you translate that into annual compound return you will see that this means a yield of just around 8% per year. If you had been so unlucky as to invest in 1999 instead, you would still hold a loss 13 years later of over 20%. Had you invested in 2007 your loss would be even greater. Although equities do tend to move up in the long run, most of us cannot afford to lose a large part of our capital and wait for a half a lifetime to get our money back. If you are lucky and invest in a good year oreven a good decade, the buy-and-hold strategy may work out but it can also turn out to be a really bumpy ride for quite a low return in the end.
So HODL .................
