Hedge Fund for Average Joe

Today is the first day of the new headline under the SnapTrader Blog.  It reads, “Hedge Fund Returns for the Average Joe”.  It’s a bold claim to say that this blog, and my vision, is to provide the returns that professional money managers can achieve to a person of middle class means.  But that IS my vision. 

If you’ve been following this blog at all you know that I have made my trades and returns available to people everywhere, at a minimum account size of only $5,000, through Covestor.com.  That puts in within the reach of most of the working class Joe’s like me.  And it requires nothing more than setting up the account and funding it… no trading activity needs to take place on the part of subscribers.

Can I achieve “Hedge Fund” returns?  That’s a really good question, and I’m not sure what it means.  Many professional money managers fail to beat the S&P500 or other market averages regularly, and in bear markets they frequently lose money.  I have set my sights much higher than that, seeking to be among the top few percent of money managers.  And there are three specific ways that set my trading style apart from the masses, which also characterize my results:

1. My objective is not to beat the market, but to provide absolute returns.  In other words, even in the worst bear markets my plan is to make a profit.  If you don’t think that’s possible please review the performance results charts of the MultiStage Trading System back-tests.  To put it concisely, my plan is to make at least a 20% profit per year (you might have seen the recent 2010 wrap-up… I exceeded that nicely, and Covestor subscribers achieved about 20%in the past six months).
2. I never want to be more than a few days away from an all-time high in my account.  I can’t stomach long, deep drawdowns like the market is currently experiencing.  I don’t know when the SP500 will get back to 2007 highs (or IF it will).  My plan calls for incremental and consistent profits.  I’m not saying I never take a loss… I do.  I’m saying that I strive to keep them shallow, and recover quickly.
3. My trading plan is very rigid and mechanical.  I never have a bad trading day, because I don’t trade – the system does. Sometimes the system has a bad day, but it’s not because I was emotional or not thinking straight.  It’s simple to just follow the rules.  It took years to get my trading system where it is today, but I follow it strictly.  This blog is packed with information about how the system works and many of the characteristics about it.

Finally, let me say that all of this is not without risk. I have said many times that we have no way of knowing whether my particular approach will work into the future, as it has in the past.  Conditions can change which make the past patterns irrelevant.  Trading in the stock market is risky, period.

I realize I’m making some bold and forward statements here, but I feel like it’s necessary to explain how I can back up my simple vision:

To make hedge fund returns available to the Average Joe

Good Trading…