LBill

A Simple Momentum System for Beating the Market

There can be long periods when markets are not trending and price keeps crossing above and below the 10-month (or whatever) moving average one is using to buy or sell. For example, if I were using PCRIX as my commodity investment there were two buy-sell round trips in 2005 and four round trips in 2006 which ground out loss after loss. I wouldn't have been able to stay with it over that 2 year period - would you?

Is the Investment World Flat?

Since diversifying between domestic and foreign stocks presently doesn't offer much diversification "bang for the buck," not much in total portfolio risk-adjusted return is likely to be lost for awhile by being under-diversified globally so it seems of minor importance at least for a time. Why not look for better ways to diversify until global equity market correlations actually do become smaller? If you had diversified into foreign stocks 10-15 years ago, when they were not as highly correlated with the U.S. market and were not performing as well, that would have paid off handsomely. Might be OK to do now if it helps you sleep better, but I wouldn't count on as big a payoff as waiting until global markets de-synchronize a bit.