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The Secret To Beating The Market

Beat the marketIt's official. At least that's the conclusion from the flash boys over at Morgan Stanley. The most effective way to beat the Australian market over the last 26-years?

Momentum¹.

You know: buying stocks that go up. Selling the ones that go down.

And it wasn't a slight aberration. Momentum was a 10 out of 10 on their ranking system.

Value investing? Ranked 1 out of 10.

Hard to believe, I know. Don't get brainwashed by the sales and marketing tripe sold by the Buffett parrots.

According to Morgan Stanley momentum beat the S&P/ASX200 by 8.8% per annum since 1990. That's a whopping outperformance.

Trying to scratch out an extra 1% or 2% from the bottom of the biscuit tin? It's time to consider momentum. Here's a few resources to get you going...after all, momentum is what we do!

Background reading: Unholy Grails

ASX Strategy: ASX Growth Portfolio

US Strategy: US Momentum Portfolio

So there you have it. There's method behind the madness.

 

P.S. Here's a few other authors who talk about momentum:

1. Andreas Clenow
2. Michael Covel
3. Gary Antonacci

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