Investing Strategy No. 1
12 August 2004Investing Strategy No. 1 – Using the 200 day simple moving average for long only positions.
This simple investing strategy utilizes the 200 day simple moving average for moving in and out of investments. The investment instrument will be any Mutual Fund, Index Fund or Exchange Traded Funds (ETFs). In this case we will only utilize long positions. In Strategy No. 2 we will look at using both long and short positions.
With this strategy you would have your money in an Investment when it is above the 200 day simple moving average. You would also accumulate in the chosen investment.
When the particular investment moves below the 200 day simple moving average you would move all funds to an Investment that pays interest like a money market account or Mutual Fund that is similar in nature. You would also accumulate in the chosen investment.
Checking a chart weekly for your particular investment should be adequate. When it starts heading for the 200 day line you’ll probably want to start checking more frequently, looking for the right day to move your money.
Isn’t that simple? Well maybe not as simple as dollar cost averaging ( regular dollar purchases no matter what the price or market direction) but it will deliver a lot more appreciation. Check a 5 year chart for your favorite investment and see how each method would have performed.
In Strategy No. 2 I’ll show you how to make money no matter which way the Markets are moving.
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