This post from A Wealth of Common Sense makes a very compelling case for diversification. It also happens to be a powerful argument for Tactical Asset Allocation.
Asset class returns are anything but stable. Consequently, a trend following approach seeks to capitalize on these multi-year swings. Click here to read a white paper by John Lewis which tests a relative strength-based approach to trend following on an asset class level.
Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss. This example is presented for illustrative purposes only and does not represent a past recommendation. The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value.
HT: Abnormal Returns
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