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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.

 

Or for more ways to listen:

 

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

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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