As we have seen over the last few years most people lose a lot of money when the market becomes volatile. In fact market volatility is one of the worst things for the value of stocks and bonds. When uncertainty is high people get scared and run for the hills. When investors run for the hills prices go down as investors sell and go to cash.
Contrary to most of the advertisements you will see from different mutual fund companies not a single regular equity fund made money in 2008. In fact not one in the world. That sounds like hype but it is the truth. The overall market was down over fifty percent and the funds went down with it.
So did anyone make money? Yes, there were two categories of traders that made money. Short sellers and the global macro traders. Short sellers lose money in bull markets and make it in bears. Global macro traders on the other hand are able to make money in any type of market in any asset class.
Macro traders are able to profit from uncertainty because they are able to trade several different asset classes both long and short. In fact by using options they can even make money on neutral trades. The macro trader is the most flexible type of trader out there trading stocks, bonds, commodities, and currencies in any country. This flexibility forces the investor to be very strict on risk management and stay very flexible in their investment philosophy. Global macro has been proven time and time again to be the superior trading style.
Credits:
The Macro Trader helps people profit and navigate the global financial markets using Global Macro Trader strategies.
The Macro Trader a global macro trading and research newsletter.
Article Source: http://EzineArticles.com/?expert=David_Taggart
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