Henry is a long-term follower. His philosophy is based on the premise that market prices, rather than market fundamentals, are the key aggregation of information needed to make investment decisions.
He says, The markets are people’s expectations, and these expectations manifest themselves as price trends.
We live in an uncertain world. One cannot predict the future of anything.
In an uncertain world, identifying and following trends may be the only reasonable investment approach over the long term.
Henry feels that a mechanical approach has more value since no scientific approach or solid testing can be applied to discretionary trading.
Henry says that when he first researched the markets in the 1970s, he was looking for a methodology that would work through many market conditions. His research showed that long-term approaches work best over decades.
There is an overwhelming desire to act in the face of adverse market moves. Usually it is termed ‘avoiding volatility’ with the assumption that volatility is bad. However, I found avoiding volatility really inhibits the ability to stay with the long-term trend.
The desire to have close stops to preserve open trade equity has tremendous costs over decades.
Long-term systems do not avoid volatility, they patiently sit through it. This reduces the occurrence of being forced out of a position that is in the middle of a long-term major move.
Henry feels that a mechanical approach has more value since no scientific approach or solid testing can be applied to discretionary trading.
Henry says that when he first researched the markets in the 1970s, he was looking for a methodology that would work through many market conditions. His research showed that long-term approaches work best over decades.
There is an overwhelming desire to act in the face of adverse market moves. Usually it is termed ‘avoiding volatility’ with the assumption that volatility is bad. However, I found avoiding volatility really inhibits the ability to stay with the long-term trend.
The desire to have close stops to preserve open trade equity has tremendous costs over decades.
Long-term systems do not avoid volatility, they patiently sit through it. This reduces the occurrence of being forced out of a position that is in the middle of a long-term major move.
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