Top fund manager says stock market investing all comes down to this one factor
For many stock market investors, long-term consistent gains might seem like folklore.
Yet this sort of basic stock market success would be very attainable if investors just did one thing, according to a leading hedge fund manager.
Chris MacIntosh, the founder of Glenorchy Capital and publisher of the hugely successful Capitalist Exploits newsletter, has revelled the strikingly simple key.
What is it?
Forget following gurus, forget reddit, forget speculative stock tips.
You just need a strategy.
MacIntosh said he’s amazed so many investors he speaks to have no basic strategy when it comes to allocating their money in the stock market.
Speaking during a webinar exclusively for Capitalist Exploits subscribers, MacIntosh said investors seem aware of the myriad of risks in the market, yet they have no plans for how to deal with them.
“You have the risk of inflation, you have the risk of deflation, you have the risk of a market crash, you have the risk of a market blow-off, you have all sorts of risks and you got to try to manage all those different risks.
“But people worry about things that they can’t control and lose more money as a consequence of not having a general overall strategy.
He says investors need to change their mindset when it comes to approaching risk.
“People have these concerns, but what you need to say is ‘what are you going to do about that?’
“If you’re worried about a crash, what are you going to do? Are you going into cash? Are you going to go into bonds? Treasuries? Fine, but for how long? How long are you going to sit there?
“When I ask this question, people say ‘oh until it crashes’, but what if it doesn’t crash, and when is it going to crash? Do you have a date? Nobody has the answer to that.
“So, people will pull all their money out, sit there and wait for some crash, it doesn’t happen… What even is a crash? Is it 30% down, is it 50% down? So you have to have a strategy, if you don’t have a strategy you will be whipsawed and you will lose money.”
Positioning for trends
The investment strategy which has led to strong returns for MacIntosh’s Capitalist Exploits subscribers is centred around identifying and positioning for long term global macroeconomic and industry trends.
“Our general overall strategy is to focus on the three to five year time frame and look at where we need to be invested to come out alive over that time frame, so we look at major trends unfolding and we position accordingly for the long term,” said MacIntosh.
Asia Markets can reveal one of the key trends MacIntosh is currently positioning for is pain in bond markets.
“Globally, there is currently the highest level of positioning in bonds in 20 years with people thinking that we’re going to have a soft landing and the Fed is going to cut rates.
“That may take place but even if it did the market’s already very aggressively positioned for that. So the asymmetry doesn’t lie in having the same view, it lies in the opposite.”
This is one example of the contrarian positioning that has led to the rapid growth and strong returns of this Fund Manager’s subscriber audience at Capitalist Exploits.