Most professional and non-professional trader/investors do not have a clue on how to look at market data and make choices without cognitive biases rationalizing insignificant information.
Investing is not easy. Improving the probability of success in
trading and investments requires having strategies which are adaptive to
price direction. Shortcuts and attempts to simplify wealth management
by herding investors into passive ETFs is part of a narrow approach.
Broader more adaptive algorithmic solutions improve the probability of
success.
The lack of success of most investors is due to perceptions of risks
and misconceptions on how they apply to investments. Most investors are
risk adverse. They would rather avoid a loss than seek a gain. Most
investors act as if small risks are the same as big risks. This near proportionality identifies the flaw in modern portfolio theory where notions of market efficiency expose investors to large downside events.
