Definitely feels uneasy after such and easy year of trend following - it's often followed by a big drawdown - no method is without its rough patches. Mean reversion methods help cushion that blow a lot when it comes.
My CTA funds have me in all sorts of high beta stretched positions, including crypto, that I would never own unhedged, but I can sleep at night due to trend-following’s robust risk management systems that are more sophisticated than any system I would personally employ. The computers will change course as needed, so I don’t need to lose sleep over it and can ride the wave until it eventually breaks. And trend exposure diversifies my other risk assets, letting me ride those other waves with less concern as well. Keeps me in risk assets and out of mattress cash, smooths the compounding, and reduces the reliance on long duration bonds during an inflationary period. Trend is a great tool indeed!
Definitely feels uneasy after such and easy year of trend following - it's often followed by a big drawdown - no method is without its rough patches. Mean reversion methods help cushion that blow a lot when it comes.
My CTA funds have me in all sorts of high beta stretched positions, including crypto, that I would never own unhedged, but I can sleep at night due to trend-following’s robust risk management systems that are more sophisticated than any system I would personally employ. The computers will change course as needed, so I don’t need to lose sleep over it and can ride the wave until it eventually breaks. And trend exposure diversifies my other risk assets, letting me ride those other waves with less concern as well. Keeps me in risk assets and out of mattress cash, smooths the compounding, and reduces the reliance on long duration bonds during an inflationary period. Trend is a great tool indeed!
I like having die-hard guys like you around