The winter strategy that outperforms

5 min Read Published: 01 Nov 2014

winter portfolioAlthough momentum investing lies at the heart of the 80-20 Investor algorithm I'm always keen to look at and explore alternative strategies or tested conventional wisdom.

One interesting anomaly that has shown to provide consistent outperformance over the last 20 years is what is known as the six month strategy. My own research, and countless academic papers, has shown that simply reviewing your portfolio every six months massively enhances your investment returns. Buy and hold is for the lazy and those not concerned with maximising their returns.

But the winter strategy states that you make better returns if you invest on 1st November and then sell out of the market on 30th April the following year, than if you remain invested all year round.

According to data compiled by Harriman House, publisher of The UK Stock Market Almanac, £100 invested in the FTSE All-Share Index continuously since 1995 would have grown to £231 (excluding dividends).

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