Agreed. It’s very difficult to make a 20% consistent CAGR return with a long only diversified portfolio in a bear market especially when the main index is down more than 20% a year. But it may be possible to make such return in below conditions
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As per history, the market remains in BULL phase ~75% of time and whereas it goes through BEAR phase remaining time. A proper long only portfolio could give 20% consistently when the market remains in the BULL phase (so 75% time). To my experience, long term investment is more of a game of controlling EQ (emotional quotient) than a IQ (requires little common sense though)
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It’s also possible to even make 20% return in remaining 25% phase (i.e. BEAR phase). One has to diversify the portfolio with very good QUANT strategies (maintaining long as well as short positions and diversifying a lot of short term trades in different markets/assets). Hedge funds like Citadel/Renaissance Tech/Our own Quant fund seems to be doing it consistently. Now this truly requires IQ (lots of math/stats/probability etc…) rather than EQ (as most likely machine will trade on behalf of human, hence EQ is anyways controlled by machine)
So it shows that everything is possible if one stays hungry and foolish enough to achieve the goal:)
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