This is a great question that is not asked enough in the passive era of ETF’s.
The United States has bought into ETF’s. After being ripped off with spreads and poor information in the 1980’s and 1990’s, America got it’s dream…penny spreads.
But, the machines wore us out.
Josh has a good post about the tape being worn out. It’s pretty close to accurate if you believe the tape is human. The old tape is mostly machine though and you can’t wear out machines. What you see scrolling across CNBC and wherever else you get the tape is machines trading ETF’s.
Stocktwits is a new type of tape. No bots, no automated feeds, curated as much as possible by the team, community and technology for spam. We are not worn out. We are just getting started. We love our jobs. For most it is a primary career, for many others like Gordon Bowman, it’s a second job.
Gordon is a fantastic example of an ‘active’ investor. His blog post nails it. He has a plan. He understands ETF’s, their roles, retirement and his first job. Take a read and bookmark it. I intend to share with every new member of Stocktwits that asks how to get started in active investing.
Now there are many ways one can be successful in the markets, albeit they are all hard to find and carry out. The main way I try to is by being in strong stocks during market uptrends and reducing exposure during the downtrends. (I’m not a big fan of shorting because I feel it is too difficult and frustrating but that’s for another blog post).
I am always trying to redefine my strategy because people always ask me how I think about investing. Lately I have drilled it down to this:
I want to stay in good markets (uptrends) as long as possible and out of bad markets as long as necessary.