Investing in the S&P500 beats AI Trading

Passive investing in index funds beats AI trading over time. Focus on low-cost ETFs for retirement, and rebalance yearly for consistent growth and less hassle.

Investing in the S&P500 beats AI Trading
Photo by Anukrati Omar / Unsplash

I forgot to link to this image back in early May 2019. It's from Bloomberg and it makes a lot of sense, maybe eye opening for some.

(c) Bloomberg

Essentially it shows that the market is the be and end all. Of course the market is an average and there are funds or AI traders that beat the average, but others will underperform the average. Over time, your little 'edge' will eventually underperform and you have to keep writing new code and new strategies. You can write all the trading algorithms you want but in the end it'll be futile.

If you started using the AI back in 2016, you would've outperformed the S&P500 for a short while but then...

Save your time and just do passive investing. Buy high quality funds and ETF's with low expense ratios over a diverse asset class. That's it. Then rebalance once or twice a year.

Yeah, but Tom you post Forex and Stock stuff from time to time. Yes, I do and I have some 'mad money' that I trade to satisfy that itch. Do I trend follow with that mad money, yes. Do I go long or short currencies, yes. Have I started writing Python scripts to crunch market data and build charts? Yes, I do that so I can learn Python better and it's what I do to keep myself in the market Zeitgeist.