VT: Trend-Following Beat Buy-And-Hold In 2018

About: Vanguard Total World Stock ETF (VT)
by: Conviction Capital Research
This article is exclusive for subscribers.
Conviction Capital Research
Deep Value, momentum, financial statement analysis, trend following

Trend following is a commonly practiced strategy that historically provides equity-like returns with bond-like volatility and drawdowns in portfolio value.

Despite being a widely followed technical indicator, investors can still use trend-following to protect their portfolio from massive drawdowns. Trend following strategies can also be incredibly simple to deploy.

A simple trend-following strategy based on the 200-day moving average of the Vanguard Total World Stock ETF would have protected investors from the recent drawdown in US equity markets.

Investment Thesis

When it comes to portfolio strategy, as investors we are often our own worst enemies. Equity investors have a habit of timing the market poorly, and it usually results in severe underperformance relative