Warren Buffett has said that trying to time the market is the number one mistake to avoid.
Market timing is hard, if not impossible to do, as it often results in the investor buying or selling too late or too early rather than right on time. To even consider a market timing strategy is generally frowned upon by professional investors.
But we’re not professional investors, we’re just engineers who were convinced that there must be a simple yet effective way to pick up on and follow trends in uncorrelated asset classes. We don’t hope or expect to be right every time, but we do hope and expect this strategy to do a decent job at minimizing losses to improve the effect of compounding gains.
In this post, I will lay out the framework of a simple, intuitive and profitable strategy that has worked well over the last 150 years. I will provide all the data used so that you can perform your own analysis. I’ll also provide tools you can use to implement this, or a similar strategy, on your own for free. No proprietary software necessary, no expensive financial advisor required – just you, some logic, and systematic rules-based investing (no emotion!).