When markets start to sell off, the common questions is "Should we be shorting?"
Fact is, bearish markets are different from bullish.
Shorting is definitely harder than it looks.
Downtrends are difficult to ride. They have swift counter trend moves which often knock out trailing stops.
The largest profit can be 100%, yet only if the stock goes to zero.
In late 2008, early 2009, I was approached by various financial planning firms and some stock brokers.
Their 'buy and hold / can't time the market' business model was crashing and burning alongside global stock markets.
It's a hard sell to tell a client to 'stay the course' when their portfolio of safe-as-houses property trusts with nice yields is 50% in the hole.
What they wanted was a strategy that was simple to implement, made market returns, without the large downside.
When asked about the meaning of WEALTH, most responses centre around money.
Sure, money gives us options.
Yet keeping a narrow view of money can lead to a poorer outlook in other aspects of your life.
A common theme with successful traders is they rarely focus on the money.
Not because they shun monetary wealth.
There is an old saying, "The best loser is the long term winner".
I completely agree.
Professionals have the ability to cope with losses and deal with periods of equity decline.
Amateurs don't.
Because they believe professional traders rarely have losses.
Is your preferred trading strategy systematic? Rules based? Discretionary?
Here's the thing...
There are never any guarantees.
Even though marketers and spruikers will tell you otherwise.
Here's the thing: throughout your trading career, you are going to be wrong, and often.