The Double-Edged Sword of Trend Following

Two Quants and a Financial Planner

Apr 22, 2024•54 min•Season 1Ep. 61

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Episode description

In this episode of Two Quants and a Financial Planner, we dive deep into the world of trend following investment strategies. We explain what trend following is, discuss the potential benefits such as downside protection during bear markets, and explore some of the challenges involved, including false signals, whipsaw risk, and the difficulty of sticking with the strategy during underperforming periods. We also talk about how trend following can be incorporated as one component of a diversified investment portfolio and why the sizing and blending of strategies is so important.

We hope you enjoy the discussion.

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