If you are a manager and your strategy has ever had a losing year, why would anyone ever give you any money? If you are a private investor and your general overall retirement fund of which you have power over has ever lost money, you need to find someone else to manage your affairs. If you are an active trader, professional, then you probably should never have a losing month.
If you are an strategist manager, rule number one is never have a losing year. Sounds tough because even the great brand name investors have had not only down years but really bad down years. Remember however, guys like Buffett, while value investing for the long term, they are really brand name savers. If you are willing to hold a stock over a long period of time, up year and down year, then you don't understand risk and do not care if you an alternative upside opportunity even exists. You are thus committed to "hoping" as the vast majority of stock holders are and inevitability reliant on massive intervention from central banks to make you good because the reality in today's world is that buy and hold investing is a fallacy. From AAPL on down, ultimately you are going to have that really bad year.
It has taken zero interest rates for seven years to support your stock portfolio. Over the same time there has been almost no real growth in the economy, fewer employed, and an absolute fear of it all falling apart in we cannot revive our once dreaded enemy, inflation. What's worst, the investing industry has now created the ETF trap where seas of predominately passive investment vehicles have been created to primarily capture the sales transaction for their hosts while offering little in the way of investment opportunity or protection.
What's one to do? Hold stocks for a short time horizon regardless of the tax implication. If you are worried about the taxes and not about losing years then you will never get it anyway.
Find great index managers providing absolute return strategies without ever having a losing year.
Find managers that have strong compound returns and can tell you what $20,000 would have done after a year or five years, and not based on some VAMI metric.
More to come.
