Page 105 - Ready Set Retire

Ready. Set. Retire!

Try It Yourself

Here’s a simple formula that uses momentum and hedging.
Select five low-cost index funds that cover:

1. US Stocks
2. International Stocks
3. Real Estate
4. Commodities
5. Bonds

Manage them using these three simple steps:
Step1: Check only on the first or second day of each month.
Step 2: Only hold funds when they have positive returns over
the past five and ten months; think short and longer term.
Step 3: Hold 1/3 each top three fund. If only two have positive
results over the last five and ten months, hold only those and
go to cash or equivalent with the balance. If none of the funds
have positive five and ten month runs, go to cash until they do.
This is a very simple, but effective formula for tactical
investing. Following is an example of the results.

95