Want To Beat The Market ? You Need To Know This !
image credit to asymmetryobservation.com Would like to share this great article on the subject of “ Regression to Trend/Mean”: Regression to Trend: Another Look at Long-Term Market Performance <from www.advisorperspective.com> “About the only certainty in the stock market is that, over the long haul, over performance turns into under-performance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis (see footnote below) to the question. Below is a chart of the S&P Composite stretching back to 1871 based on the real (inflation-adjusted) monthly average of daily closes. We're using a semi-log scale to equalize vertical distances for the same percentage change regardless of the index price range.”