CTC,
If I may, I will add a fourth approach, which is a hybrid of 1, 3 and some additional bells and whistles. 1, in general, is rather boring, so maybe 80% of funds is about all it deserves for those with a mathematical bend, timid in mind and daring at heart (read cautious gamblers). With the remaining 20% and armed with in-depth knowledge of derivatives from the practical as well as the theoritical perspective (this in general is an extremely boring study, only recommended for those who love arcane fields like game theory and stochastic differential calculus), one may try to invest in derivatives of the companies presented in 3. My personal experience has been that the combination yields slightly better than the average return that you have mentioned in 3, albeit with a lot more risk. So, in effect, this is buying risk, something that traditional economics will scoff at. :-)
I do not recommend that anyone follows this strategy, it is rather bizarre even IMO, though I do practise it.
-BGR. |
