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Variability Drain: The Silent Killer of Long-Term Compounding
- Fabio Capela
- Systematic investing , Portfolio mathematics , Compounding , Risk management , Quantitative finance , Volatility management , Long term investing , Portfolio optimization
You spend years refining your strategy. You optimize your entries and exits. You backtest it across decades. On paper, it shows strong returns. Maybe even impressive alpha. But something keeps bothering you. Despite solid average returns, your portfolio isn’t growing the way you expect. You’re not losing in any dramatic way — no catastrophic drawdowns, no obvious mistakes. But something subtle is bleeding your wealth. Quietly. Relentlessly.
Read MoreTrend Following Strategies: What 137 Years of Research Reveals (2024 Guide)
- Fabio Capela
- Finance , Investing strategies , Portfolio management , Risk management , Trend following , Systematic trading , Market momentum , Volatility targeting , Machine learning , Reinforcement learning , Alternative data
Trend following has long been a cornerstone strategy for traders and investors. By systematically riding market momentum, trend following strategies have historically delivered strong risk-adjusted returns across various asset classes. But how does the strategy hold up in different environments, and what does academic research say about its efficacy? Let’s explore the key insights from a wealth of scientific literature on trend following.
Read MoreThe Sector Rotation Strategy That Beat the S&P 500 by 2% Annually for 26 Years
- Fabio Capela
- Sector rotation , Business cycles , Tactical asset allocation , Economic indicators , Etf strategies , Quantitative finance , Systematic investing , Market timing , Cyclical investing
Most investors have heard the classic advice: “Time in the market beats timing the market.” While this wisdom holds true for individual stock picking, what if we could time entire sectors of the economy based on predictable business cycles?
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