Tricky & Confusing Environment

Discussion in 'Trading' started by ByLoSellHi, Feb 21, 2007.

  1. I know there's a good mix of bulls, bears and in-betweeners here.

    Regardless. Does anyone else see things as being as murky as I do?

    I feel that if I am not achieving a consistent 3% on my money a month, I am actually losing ground, and that if I try to achieve 3%+, I am forcing myself to take on a level of risk I find disconcerting.

    Here are the risks as I see them, putting pressure on me, not necessarily in order of priority:

    1) Inflation
    2) Lack of volatility
    3) Slowing earnings
    4) Mixed economic picture
    5) Interest rate uncertainties - exacerbated by foreign market interest rate divergences
    6) Foreign markets seems to be performing better, but are also more volatile and susceptible to sharp downturns (I know, that's redundant)
    7) Commodity pricing gone wild
    8) Increasingly complex financial engineering and financial/leverage/hedge products to try and incorporate into trading and investment strategy
    10) Definite housing correction that may spill over into consumer spending
    11) Manufacturing weakness
    12) Information overload

    Am I alone in feeling overwhelmed lately? I know the simple strategy would be to catch a ride on index funds and just tag along, with stops in place, but where's the outsized reward profile in that?
  2. I guess the big question is what markets are you trading? I also would suggest that your "risks" below are only risks from YOUR perspective. I believe the only way to "interpret" those risks and their effect on the markets is thru various technical means -- otherwise, you are only "guessing" what effect those "risks" have on the markets.