A Few Math Formulas to Help You Understand Investing
Always be wary of games that appear to have positive expectations but actually lack sufficient win rates—for example, so-called "star funds" with timing and stock-picking strategies that seem to win more than 50% of the time. In reality, a 50% win rate is far from enough. (At the end of the day, you must choose bets with favorable odds.)
Reducing trading frequency can improve your win rate; alternatively, think of it this way: the more you trade, the faster you burn through good luck. The more patient you are, the more good luck accumulates.
For ordinary people, the best approach is to allocate a mix of S&P 500 and U.S. Treasuries, then rebalance dynamically.