No. of Recommendations: 1
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.That's why you have a written plan. rebalance to keep at 70-30, and for every 10% decline, put 2% more into stocks. For example, when the market is down 10% you would have a 72-28 portfolio.
I don't have a written plan yet. I have to think of something that I can emotionally stomach. Maybe for every 10% decline, you would go add 1% to stocks, and be at 71/29.
That's not a great bet on stocks, but when the world looks like it is going to end, it is very hard to place a huge bet on stocks.
