I do. But to beat the market, selling some bonds, and buying more stocks when the market is down gives you a big edge.

Not really. I believe that in long history bonds & stocks tend to move opposite, but in recent times bonds crashed along with stocks.

Closest I can quickly model your idea is at Portfolio Visualizer. Dual Momentum with 5 month lookback.
68 switches (trades) in 30 years. Almost the same CAGR as buy&hold S&P500, albeit with much lower volatility. https://www.portfoliovisualizer.com/test-market-ti...



However, a 1 or 2 month lookback -- which I think is what you are contemplating -- is much much worse.

Plain Relative Strength (5 month lookback) was a tad better.


The main thing appears to be that the timing model(s) avoid the large S&P500 bears. Problem is, you don't know when to hop back in to stocks until well after the bottom. You cannot know at the time that it _is_ the bottom.

Mechanical Investing FAQ

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