What is it? Global Macro is when you look all over the world for the best trading opportunities in any market. Instead of pigeon holing yourself into one style or category such as small cap US equity, you should be looking for the best trades period. Most global macro traders look at the best absolute and risk adjusted trades and not the weak relative basis trades.
Too many traders across the world only look at their local markets but the truth is that there are great opportunities across the globe. In fact many times they are better then the ones at home. Don't focus all of your attention on your stock market. Instead focus it on the best opportunities.
Who needs all these asset classes? The financial press talks a lot about the benefits of diversification, but what most people don't tell you is that most diversification is almost a waste of time. For instance, if you have a portfolio made up of 25% US small cap, 25% US mid cap, 25% US large cap, and 25% US fixed income, you are barely diversified at all. Yes you have your money spread throughout the US economy, but 75% of your money is in US equities. Even worse, is when the press tells you to just buy and hold an index fund. That means that you are trying to do almost as well as the index and that you are always fully invested.
If you have been schooled in the ways of the (flawed) efficient market hypothesis, you probably believe that sitting in an index fund or diversifying across US asset class is an ideal situation. You are going to get the returns of the overall market minus the fees, and over time you will create wealth. While this may be the case, what the financial press fails to tell you is that buy and hold only works if you have a very long time horizon.
The long run is fraught with different hazards. Not the least of which is that the market has gone virtually nowhere for up to 20 years at a time more then once in the last 50 years. if you can sit with zero or even negative returns for years on end then be my guest. if you want something better then read on.
Buy and holding an index may be even worse then doing nothing. If you had bought the SP500 10 years ago you would be sitting with a zero percent return right now. If that sits well with you then good luck. You would have made more in a savings account with far less volatility and tax consequences. Buy and holding index funds doesn't work in the real world.
Sitting for 10 and even 20 years on negative returns have you down on investing? If you are like most investors you are frustrated and need help. Look at different investment styles that are really different. A new stock picking strategy is not much different then buying an index of stocks. Instead open your eyes to different asset classes and countries and find the best risk to reward opportunities the world over. Global macro trading allows you to see it all. - 15224
Too many traders across the world only look at their local markets but the truth is that there are great opportunities across the globe. In fact many times they are better then the ones at home. Don't focus all of your attention on your stock market. Instead focus it on the best opportunities.
Who needs all these asset classes? The financial press talks a lot about the benefits of diversification, but what most people don't tell you is that most diversification is almost a waste of time. For instance, if you have a portfolio made up of 25% US small cap, 25% US mid cap, 25% US large cap, and 25% US fixed income, you are barely diversified at all. Yes you have your money spread throughout the US economy, but 75% of your money is in US equities. Even worse, is when the press tells you to just buy and hold an index fund. That means that you are trying to do almost as well as the index and that you are always fully invested.
If you have been schooled in the ways of the (flawed) efficient market hypothesis, you probably believe that sitting in an index fund or diversifying across US asset class is an ideal situation. You are going to get the returns of the overall market minus the fees, and over time you will create wealth. While this may be the case, what the financial press fails to tell you is that buy and hold only works if you have a very long time horizon.
The long run is fraught with different hazards. Not the least of which is that the market has gone virtually nowhere for up to 20 years at a time more then once in the last 50 years. if you can sit with zero or even negative returns for years on end then be my guest. if you want something better then read on.
Buy and holding an index may be even worse then doing nothing. If you had bought the SP500 10 years ago you would be sitting with a zero percent return right now. If that sits well with you then good luck. You would have made more in a savings account with far less volatility and tax consequences. Buy and holding index funds doesn't work in the real world.
Sitting for 10 and even 20 years on negative returns have you down on investing? If you are like most investors you are frustrated and need help. Look at different investment styles that are really different. A new stock picking strategy is not much different then buying an index of stocks. Instead open your eyes to different asset classes and countries and find the best risk to reward opportunities the world over. Global macro trading allows you to see it all. - 15224
About the Author:
Jesse helps people find different Global Macro Trading opportunities. The Macro Trader Looks for the best opportunities across the globe using ETF's for both retail and institutional investors.
