Sun Tzu teaches us in the Art of War about the basics of Trend Investing

Sun Tzu was a Chinese military strategist in the 6th century BC. He wrote the famous book “Art of War”. The book has 13 chapters, each dedicated to a different aspect of warfare. What has this to do with outperforming the stock market, you may ask.

In Chapter 10, Sun Tzu gives us the answer: “He who knows when he can fight and when he cannot, will be victorious.” This quote has been the secret behind how also you can outperform the stock market.

Consistently picking stocks that do better than the overall market is a very tough job. If you can do that, it means that you know better than the whole world combined.

Many people are involved in picking stocks to outperform the market. In the short term, a number of them will be successful. But the longer the period you consider, the fewer stock pickers will be successful consistently. And maybe over a period of 20 years, only a handful out of all those millions of stock pickers consistently outperforms the market.

Sun Tzu Taught Us to Pick the Moment

Afterwards it is very easy to see who is a part of that handful. However, to identify these few upfront out of the millions seems to be an impracticable task. And it is very good possible that some or all of these stock pickers will fail the coming year.

Listen, I am very well aware that there are fantastic stock pickers out there. But they are not all the time fully invested in the market. They do not only pick and choose their stocks, they also pick their moments. That is what we have in common.

I am no good in stock picking. And I do not want to be good in it. It would take too much of my time. And going back to Sun Tzu, I use a different strategy and tactics to win and beat the market. I know when I shall fight and when I shall not fight.

Win When Not Fighting

My approach to outperform the market is based on winning when you do not fight. Look at any historic chart of a stock market index price. You easily can see longer periods of market rise and longer periods of market decline. When markets rise it is difficult to rise faster. Then you would need to be able to know more than the market and pick the right stocks.

But when markets decline, it is easy to beat the market. The easiest way is by just taking your money out of the market (selling your funds) and putting your money in a savings account. And if you are more aggressive, you could even short the market by buying a Short ETF for a market index.

Thus when markets rise, I easily keep up with the markets by investing in index funds. And when markets fall, I keep my money in a savings account or short the market.

In this way also you can outperform the market without being a genius stock picker. Our “thank you” goes to Sun Tzu. He only forgot to tell us how to we can know when markets start to fall and rise. Luckily for you, we have some good no-risk offers that you can use to learn all about this aspect. Click here to check them out…