Basic Strategy Using Vanguard Funds
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Only hold Vanguard funds
Vanguard's fees are among the lowest. Keeping your cost down is always a good idea if you want to seek the best gains.
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Only hold funds that have buy signals for
less than 375 trading days
A fund has a buy signal if
its short-term and long-term trends are positive (i.e. have an upward trend).
This implies that
if I'm holding a fund and either
the short-term or long-term trend
turns negative then I will replace this
fund. Also, I do not hold a fund
if more than 375 trading days (about one and a half year) have passed
since the buy signal first occurred. Nothing
can go on forever and my simulations have
shown that in most cases you're better off
replacing a fund that meets this criterion
with another one.
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Hold a maximum of 2 funds and put 50% of
your capital in each fund
If fewer than 2 funds have a
buy signal (i.e. they satisfy condition 1
and 2) then I keep the remaining portion of
my capital in cash (i.e. if only 1 fund
has a buy signal then I
will have 50% of my capital in cash). If
more than 2 funds have a buy signal then
I pick the 2 funds that have the highest
“lossability” indicator (a proprietary one
that I have developed for ranking funds).
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Rebalance once a year
If the allocation among funds is uneven then
I bring the allocation back in line with my target. In this case it
means that I sell shares of one fund to buy shares of
another so that I have the same amount invested in both funds.
I only do this once a year. In my simulations I do this on
the first trading day of each calendar year.
Current Portfolio
Latest Simulated Results for this Strategy
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