For
2015 I am up about 14% in my trading account. I count 579 winners, 92
losers, 5 break even, for about an 85% win percentage. Again, for new
readers that isn't remarkable because that's about the probability of
the trades I initiate. The other side to a high win percentage is
that losses can be big, and gains almost always very small. The
bigger picture for 2015, is +14% is very good as compared to
buy-and-hold in most asset classes. Here are a few etfs, best to
worst:
SPY
-0.8% S&P 500
TLT
-4.3% U.S. 20-year bonds
IWM
-5.9% Russell 2000
GLD
-10.7% Gold
SLV
-12.4% Silver
EEM
-18.1% Emerging markets
For
average investors, 2015 was a year to preserve capital. Sure, on the
Internet you'll read reports from braggarts (some real, some paper
traders) with enormous profits. Just keep in mind that it is like
fish stories often selective memory and inflated imaginations. On the
Internet, losers tell few tales.
As
low as bank CD rates are, they did better than most asset classes.
SPY edged out a 1.0% bank CD rate after factoring the 2% yield.
Everything else on the etf list lost money. As always, predictions
are more about entertainment (and sometimes selling subscriptions)
than making money. The U.S. stock market does feel top heavy. A very
few stocks seem to be leading while there are land mines all over the
place for would-be bulls.
Perhaps
a bigger question than the direction of the stock market is the bond
market. 2015 saw some cracks in the armor. Will there be a slaughter?
Or a slow down trend? Or something else? Bond market bears may have
made modest amounts of money, but there were big drawdowns if they
stayed bearish all year. I would not be in any hurry to buy precious
metals. The bear markets tend to be long and drawn out and the bull
often offers many chances to buy. A person probably won't buy near
the lows, but buying near the lows tends to be a high risk, low
percentage play. I prefer better percentage odds, even if it means
missing some of the move.
One
big thing that I worked on in 2015 is focusing on process not
results. This idea comes from pro golfer Bubba Watson. Mr. Watson
used to get upset after missing a putt, or shanking a shot. So upset,
that he would often make several emotion unforced errors. This was
similar to me, that I would experience an inevitable loss and
overcompensate, or trade emotionally. Instead, I will focus on
staying calm. Losses are inevitable. Letting those losses cause
unforced errors is something I can work on.
Predictions
are mostly for entertainment. With that disclaimer here are a few of
mine. U.S. stocks flattish, not unlike 2015. U.S. bonds, more of a
slow errosion. Same for gold, the gentle drift down continues. As
always, I find it more useful to listen to the market, look at the
charts, then to try and predict. Directional trading is not my
strength. Slow and steady turtle or chicken kind of trading is what I
tend to favor. Once in a great while I may take a shot, but most of
those turn out to be whiffs.
Happy
new year to all. May 2016 be the best year ever.
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