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Read more about the article eToro Post – Systematic Trading and Strategic Rebalancing of Commodities

eToro Post – Systematic Trading and Strategic Rebalancing of Commodities

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  • Reading time:5 mins read

This pot was originally shared on my eToro feed on 13 March 2022. Make sure to follow me there as well, and did you know that you can copy my trading there for free? Create an account today, copy my portfolio by searching for user "Allseasonsport" to automatically duplicate my All Seasons Portfolio strategy effortlessly.

The benefit of a systematic strategy - like the one I run here on eToro - rather than a discretionary strategy is that you don't get in your own way when following rules that are proven to work.

Hence, by taking a trader/person with cognitive biases out of the equation, you increase the probability of success by avoiding mistakes caused by limits of the human brain.

It is intuitively hard to buy assets that are trending, as it feels more expensive by the day when the price goes up, and you tell yourself you will "buy the dip".

The problem is that when that dip occurs, the trend may be broken and the asset is no longer an attractive buy. That is when our cognitive biases hinder us from success.

When we go against rules, we tend to make mistakes, as the rules were set in place for a reason.

Due to these rules, I will be strategically rebalancing Commodities and Long-Term Treasury Bonds in my eToro portfolio as they have exceeded their rebalancing spans. Read more about my reasoning here.

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Read more about the article eToro Post – Prediction vs. Preparation

eToro Post – Prediction vs. Preparation

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  • Reading time:8 mins read

Is a good investment outcome always a sign of a great investment decision?

Intuitively, one could believe so, but more often than you might believe, that is actually not the case.

The past decade has favored stocks massively, meaning that investors who ignored diversified investment strategies and who applied poor risk management, have actually benefitted, while prudent investors have seen their neighbors get richer on meme stocks, cryptos and ARKK ETFs.

But are all these stock investors geniuses for achieving such a great outcome? Hardly. Such a belief among these investors – that they are superior investors – is just a form of outcome bias or “resulting” as described by Annie Dike in her book “Thinking In Bets”.

In short, this means that not all decisions with good results are necessarily good decisions.

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