Stock Trend Investing

How to invest my savings in a reasonable safe way to get good long-term returns on my investments? That is the main problem I wanted to address.

And there are a few additional requirements that restrict the possible solutions to this problem:

• I do not have the time, interest and detailed skills for analyzing P/E ratios and balance sheets from many different companies to become a successful value investor.
• I do not consider the low interest rate that I get on my savings account a “good” return.
• I do recognize that “safe investments” are relative and that certain risks must be taken to be able to earn a return.
• I do see long-term as longer than a few years and not just one or two years or 20 or 30 years.

In the end the solution I selected for investing my savings for good long-term returns in a reasonable safe way is “trend investing in stock market index funds”.

Trend Investing

Trend investing in stock market index funds is based on the following principles and ideas:

• The stock market is providing excellent long-term investing returns.
• Index funds are relatively safe and cheap ways to invest in the stock market because of their diversification and cost structure.
• The large long-term declines that stock market show during recessions and depressions can be avoided with trend indicators that signal a beginning of a bear market.
• Reviewing price action based trend signals can be automated and takes very little time.

See here the historical returns that the trend signals I am using have given me. Note that this analysis is only from 1992 till 2011. Here you can find more recent performance trend investing data that is even better.

This is working well for me. You may have something that works just as well or better for you. If you do not have a solution yet for how to invest your savings safely for good long-term returns, and you have some questions, drop me a note.