Below is a very simple and easy strategy to implement:
- It’s based on monthly quotes in the ETFs SPY, EEM and TLT.
- Every month rank them based on last month’s performance and go long the best performing.
- Hold for one month and repeat (or continue being long the same instrument).
This is all there is to it. Obviously this strategy is best performed in a tax deferred account, but without slippage and taxes the equity curves look like this:
The strategy outperforms all the other ETF’s, despite underperming SPY in both 2018 and 2019.
How did the strategy perform lately during the Covid-19?
In January it was long EEM for a 4.14% loss. For February, March and April it was long TLT. May and June was long SPY. Total return for 2020 is 17.1%.
The strategy works for quarterly rebalancing, but not very well for anything shorter than monthly.
Disclosure: I am not a financial advisor. Please do your own due diligence and investment research or consult a financial professional. All articles are my opinion – they are not suggestions to buy or sell any securities.