I've decided to stop gambling with crypto and want to put my money in safer investment that can help me to sustain my life, and the only most logical option to me right now is only low cost index fund, maybe something like CSPX / VWRA. (I'm not from US so this has better tax advantage for me)
However, I've been thinking if there's any way to "beat the market" in terms of higher sharpe ratio, ie higher reward per risk taken, but I believed in market efficiency and don't think I am smart enough to find pricing error in stocks, so stock picking isn't something I want to do, so I look for other ways, but all of them seems to have flaws, for example:
- Using rolling leaps options to replace buy and hold, but this seems to only be working due to last 2 decades are in high growth, and logic tells me if next few decades have slower growth of stagnant, rolling leaps options would results in less gain
- Wheel options strategy on SPY, seems to be smoothing out your return, that means sacrifice the potential upside for more expectable income, and backtest I've found seems to proof that it will have less return than just buy and hold.
- Wheel options on high IV stock, not something I want since that goes back to picking stock, which essentially means less diversification, more risk for more return, and hard to measure sharpe ratio but probably lower in long run. (all the people saying how they beat the market with it are only in the range of last few years where the IV is high across the market)
It seems that no matter how hard I try to find a way, eventually it always turn out buy and hold would be better in terms of the reward per risk, and it's more logical and proven, all other strategy that I've found either have more risk, or only outperform in a specific period or market condition.
Is there really no strategy that beats buy and hold a low cost index fund and can be use for decades?
Submitted January 22, 2023 at 02:56AM by LifeIsHardButEasy https://ift.tt/rYqs0Vm
