The Machine: Building a Balanced Portfolio

Markets go up, markets go down, and markets go sideways.

As simple as this sounds, few of the many millions of people who trade the markets, including those who manage money, begin with this principle in mind.

For decades the majority of Wall Street (and having been in this industry for almost 30 years, I consider myself part of it) has taught that stocks only go higher. Buy and hold and everything will turn out just great. For the past decade though we know this has not been true. And today there are literally millions of people who are directly or indirectly paying the price for this advice in their retirement funds because of this one sided philosophy.

Buy and hold has led to little to no returns over the past 10 years, so now Wall Street is preaching a new tune: asset allocation. Allocate your assets over multiple asset groups and you’ll make money.

Is this true? Maybe, but we’ll only know a decade from now. And in a world where asset class movements are becoming more and more correlated, the returns are likely going to look like buy and hold. The market goes up, your assets go up. The market goes down, the value of your assets go down. In my mind this is not progress. It’s just a well-meaning goal that assures one thing: the managers of the assets get paid no matter how well your portfolio performs.

So what’s the solution? It’s this: Go back to the most basic premise. Markets go up, markets go down, and markets go sideways. Once you begin with this truth, everything flows from there.

If you are looking for a way to take control of your financial future, to leave the world of buy and hold behind and take an active role in managing and growing your money, then The Machine may be just what you have been waiting for. Whether you trade stocks or exchange-traded funds – from  ^AAPL^ to the ^SPY^ – The Machine is the first financial software that allows traders to build quantified investment portfolios using objective, data-driven mean reversion (pullback) and trend-following strategies. In short, it is like nothing else available to the average active trader and must be seen to be believed.

To learn more – and to take a look “under the hood” of The Machine – click the link below to join me for a free live webinar presentation all about The Machine.

Building a Balanced, High Performing Portfolio with The Machine

Larry Connors is founder and CEO of TradingMarkets.com