Thank you for this insightful information on the Sharpe Ratio and the Sunk Cost Fallacy.
I totally agree with you on that past losses should not, and must not, determine a future investment strategy.
Similarly, past profits should not determine future investment decisions either.
Those who rely on the past performance of various forms of investment, whether it may be losses or profits, in order to configure their future investment strategy, will inevitably end up with suffering either heavier losses or eliminating any profits that they have made in the past.
Personally, I believe that an investor should look for real value in any investment that he or she makes.
According to Professor Glen Arnold at Salford University, UK, a "valuegrowth investing" approach is strongly recommended, since this investment specialist defines himself as a "value investor".
You are viewing a single comment's thread from:
No problem and thanks for the feedback! I believe you are right on profits too! Assuming your profit rate will stay the same is not a recipe for success long-term. I agree on the value investing piece as well; it's even an easier road than active trading.
But that isn't to dump on active trading strategies. There are profitable active trading strategies but they are usually temporary and require a lot of work to maintain.
Thanks again for the feedback!
!PIZZA