Trend following and timing
Readers will know that I am a big fan of Mebane Faber (see 'The Ivy Portfolio', in Resources). I have been reading more of his ideas and research, and have concluded that my previous efforts to trend-trade, were doomed, because they were almost exclusively focused on individual equities (mostly FTSE 350 companies), which is fine, as long as equities are rising. When equities fall, most of the stocks will fall too.
After reading Faber's research, I am persuaded that there is some merit in using a trend-following approach (aka market timing) using different asset classes. The less well correlated the classes, the better, as this will help to insulate the portfolio from devastating losses. That is the whole point, after all.
I plan to use my ISA for this form of investment, so that the different asset classes can be sold, as necessary, without incurring tax liabilities. My plan is to have timing investments in the following classes: equities, bonds, property, commodities and gold. Cash will be an asset class by default, when I am 'out of the market' in any one asset class.
I do not know what the future holds in the world of finance, so can only be cautiously optimistic about this! Members of my site will have access to my investment ideas and timings.
Meantime I will continue with my daily forex trading techniques with the expectation that this will generate a positive cash flow, while my ISA holdings are for long-term capital growth.
Members of my website now have access to my private Facebook group with information about my forex trading on a day-to-day basis. This seems to be the easiest way to disseminate information and ideas to the group.
Have a great week!
After reading Faber's research, I am persuaded that there is some merit in using a trend-following approach (aka market timing) using different asset classes. The less well correlated the classes, the better, as this will help to insulate the portfolio from devastating losses. That is the whole point, after all.
I plan to use my ISA for this form of investment, so that the different asset classes can be sold, as necessary, without incurring tax liabilities. My plan is to have timing investments in the following classes: equities, bonds, property, commodities and gold. Cash will be an asset class by default, when I am 'out of the market' in any one asset class.
I do not know what the future holds in the world of finance, so can only be cautiously optimistic about this! Members of my site will have access to my investment ideas and timings.
Meantime I will continue with my daily forex trading techniques with the expectation that this will generate a positive cash flow, while my ISA holdings are for long-term capital growth.
Members of my website now have access to my private Facebook group with information about my forex trading on a day-to-day basis. This seems to be the easiest way to disseminate information and ideas to the group.
Have a great week!
Comments
Post a Comment