Yesterday I started reading “Technical Analysis for dummies” by Barbara Rockefeller.
Now technical analysis takes a different approach to investing than fundamental analysis. But I think it’s valuable to understand both sides of the coin.
I also think it’s important to understand they are both analysis and even if you want to be a technical trader, fundamentals matter. Is the opposite true? I think understanding what you see on the stock charts could be useful even if you don’t act on it.
But overall, it got me thinking a bit about strategy.
Now to be clear – I don’t know if this makes sense as I’m just learning.
But one lesson that comes up over and over again is diversify.
Yet, it seems in many ways there’s a lack of diversity in strategy.
If diversification helped, wouldn’t diversifying your investment strategies help as well? Now this may sound naive.
But stick with me a moment.
I’m not saying don’t have a strategy.
In “What Investors Really Want”, Meir Statman writes about having different mental accounts for money.
Wouldn’t it be possible to have different mental sub-accounts within a larger capital mental account? And couldn’t you then apply different strategies to those accounts?
I genuinely don’t know the answer to these questions.
But I suspect one response might be that it would take a lot of money or time to truly manage two separate strategies (much less more).
Time probably trumps money too. With time often being the limiting factor as a solo investor.
The market moves so quickly and any strategy is likely to have a fixed time cost to implement.
Dedicating yourself to more than one will likely take more time than you can give to a task before it become irrelevant.
That perhaps starts the search for tools to help speed up the different processes.
For now, back to work. Until tomorrow.