BIG MONEY little effort

It should be the simple goal of every investor to concentrate their cash in assets as they rise in value and to stay well clear when they're falling and in my opinion, a basic strategy that aims to force you to do just that by measuring price momentum is all you need.

During my career running my own hedge fund management company up until my retirement at the grand old age of thirty-three, my staff and I tested numerous strategies for participating in the markets. Most of these were concentrated upon market price movements as we found pure fundamental analysis too subjective to include into a disciplined methodology.

One very useful benefit to using market prices as the sole input in our testing was the ability to then "back-test" our ideas across a broad selection of asset over decades of performance. For sure, the future is never going to be like the past but it is the best indication we have and if you can satisfy yourself that your investment strategy has survived all previous financial crisis and continually steered you towards profit then this is an enormous advantage, both psychologically and financially.

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Back in 1993, I hit upon a very basic but extremely successful system. This simple approach, that took my research staff and I no more than five minutes a week to operate without the use of a computer, had been tested and validated on over nearly forty years of stock market price movements back to 1951. Applied to the stock market its two rules instruct you when to invest in a stock market index such as the S&P 500 or FTSE 100 and when to liquidate that commitment and place your money in an interest-bearing account.