Tricks

Jack Schwager’s market misconceptions

Jack Schwager has developed a reputation among some of the world’s leading hedge fund managers and billionaire investors for his astute analysis of the most important factors in finance. His best-selling book series, Market Wizards, explores the strategies of some of the best-known and most successful hedge fund managers of all time.

More recently, Schwager has added to his list of accolades in founding FundSeeder, a financial data and analytics platform that helps connect talented independent traders with financial institutions.

In the most recent episode of Opto Sessions, Schwager delved into a common misconception that all investors fall prey to — overemphasis on returns.

“Look at where inflows go, they’re usually biggest after you’ve had a long bull run in the markets”, Schwager said.

“If you look at what happens 10 years, 15 years, 20 years forward — and I’ve done the analysis — the worst-performing periods come, not surprisingly, after you’ve had a really good performance and the best performance horizons are when the markets are really terrible”, he explained.

““If you look at what happens 10 years, 15 years, 20 years forward — and I’ve done the analysis — the worst-performing periods come, not surprisingly, after you’ve had a really good performance and the best performance horizons are when the markets are really terrible”

 

“If you invest when the markets are really lousy for the last five, the last 10 years relative to history — I’ve taken these numbers all the way back to the 1850s — you do best by investing for the longer term when the markets has done really badly in recent years, which is the opposite of what most people do,” Schwager stated.

 

For an explanation of why this happens, and for more on Schwager’s perspective on the markets, listen to the full episode, here.

 

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Listen to the full interview and explore our past episodes on Opto Sessions.

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