Look for a structural edge
World stock markets | 36 Trillion |
Overall US Stock market | 18 Trillion |
Mutual funds US | 13 Trillion |
Pension funds US | 15 Trillion |
Hedge funds US | 1-2 Trillion |
The strategies of the big players influence the market. Understanding what strategies they use and why is the key to finding a structural edge in the market for small speculators like us.
What strategies hedge funds use:
- Dedicated Short Bias
- Emerging Markets
- Equity Market Neutral
- Event Driven
- Distressed
- Arbitrage
- Global Macro
- Long/Short Equity
- Managed Futures
- High Frequency Trading
What strategies mutual funds use
- Value
- Growth
More money is allocated to value than growth. If you study mutual fund industry, most start out as growth funds but once size of assets increases they become value funds.
What Strategies pension funds use:
- value
- growth
- fixed income
- commodities
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