David González Romero @davidgromero: "I used a chatbot earlier..."

Spain

I used a chatbot earlier today to help me deep dive into my current sentiment about the markets, which I’d summarize with the word that begins the following text. My eToro portfolio is only an experiment with a small amount of money, but my recent moves have included increasing my cash position, adding some $BOND (PIMCO Active Bond Exchange-Traded Fund) and playing a couple of short-term bets (1 win - 1 loss) on $VIX.FUT $VXX (iPath Series B S&P 500 VIX Short-Term FuturesTM ETN) What goes next is just blunt AI-generated text, but it makes its point at describing complacency. Also posting the chart that currently dominates my thoughts. 🤖 #Complacency is a state of mind characterized by satisfaction with one's achievements, abilities, or situation, often without awareness of potential dangers or deficiencies. When it refers to financial investment, complacency means being overly confident or comfortable with one's investment decisions or portfolio performance, ignoring the risks or uncertainties that may arise in the future. Complacency can lead to poor investment outcomes, such as missing opportunities, underestimating volatility, or failing to diversify. From the perspective of today, August 24, 2023, and your location (countries under the umbrella term "Western world"), complacency may be a good term to describe the attitude and inner feelings of people who, like you, have benefited from the significant appreciation of certain types of assets after more than a decade since the latest major market crash (2008) and financial crises (2007-2012) affecting the "Western world". Some possible reasons are: • You may have experienced a long period of low market volatility and high returns, which may have made you less sensitive to the potential shocks or reversals that could occur in the future. According to a report by the European Central Bank, low financial market volatility in the years prior to the coronavirus outbreak increased the popularity of investment strategies based on targeting volatility, which could amplify market movements when volatility spikes. • You may have developed a strong belief in your own investment capabilities or strategies, which may have made you less willing to seek new information, learn from others, or adapt to changing market conditions. • You may have followed the herd mentality or succumbed to institutional pressures, which may have made you less inclined to question the prevailing market trends, norms, or expectations. Therefore, complacency can be a dangerous trap for investors who want to achieve long-term success and sustainability in their financial investments. It is important to be aware of one's own biases and limitations, and to constantly monitor and evaluate one's investment performance and risk exposure. It is also advisable to seek diverse sources of information and opinions, and to be flexible and responsive to market changes and innovations.

Not investment advice. The author may have financial interests in the mentioned instruments.

2 Mentioned

BOND

PIMCO Active Bond Exchange-Traded Fund

VXX

iPath Series B S&P 500 VIX Short-Term FuturesTM ETN

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