Sponsored content by Guillaume Decalf from www.ouifinancial.com
Each situation is different, this article was written for informational purposes only and the opinions mentioned here do not constitute financial advice.

To get started, you need to have an estate strategy (a macro-strategy) and also a specific strategy for each type of investment (a micro-strategy). 

It’s great if you were able to exit the markets at just the right time, but you still need to re-enter the market at the right time. It will be very difficult to do this without a strategy.

Below are different kinds of financial markets strategies.

Buy & Hold – Passive strategy

This is the most common strategy. You buy a fund or a stock and keep it forever. There are four rules for following this strategy:

  1. Make a diversified portfolio with different asset classes first.
  2. Rebalance regularly to keep the right proportions for different asset classes.
  3. Do not make dramatic changes when the markets fall.
  4. Make regular changes towards a more secure portfolio as you approach retirement.

You do not have to do this in your 401k most of the time because you are invested in a “target fund” which will manage all these actions for you.

This strategy can be difficult to follow emotionally because your portfolios can drop significantly as it did last month but there are ways to limit it.

Here is an example of a good strategy with 50% long-term bond and 50% diversified equity fund rebalanced every quarter – past performance is not a guide to future performance –

Investment strategy

Investment strategy

Rules-Based and Factor Investing

This type of strategy is based on a certain number of macro-economic factors or rules (unemployment rate, interest rate etc.) and micro-economic rules (volatility, low-beta vs Hi-beta stocks etc.).

This strategy secures your portfolio when the markets fall, or the economy goes into recession. It reduces your portfolio volatility but can trigger false signals.

Trend following

This is also a common strategy among finance professionals. It works well in the long-term but not necessarily in the short / medium term. Depending on the duration chosen, it can also cause numerous false signals.

This is a strategy that uses momentum over 12 months (since 1995). The fall is only -16.62%

investment strategy

Investment strategy

This is over the very long term.

If we look at only the past ten years, the results are much less impressive:


Investment strategy

Unfortunately, no strategy works perfectly all the time and there will be periods of underperformance.

Whatever strategy you choose, investing in the financial markets or other means requires a bit of work on your part.

Oui Financial uses a combination of these different investment strategies. Our strategies made it possible to greatly limit the market fall in our clients’ portfolios over the past month.

Guillaume Decalf from Oui Financial – info@ouifinancial.comAfter a 15-year career in Tech, including nine years in the United-States, Guillaume switched careers by obtaining his Financial Advisor’s License and starting Oui Financial, a firm specialized in financial planning and investments for French people and French-american families in the United States. He is based in San Francisco, California but serves clients throughout the US.

MerciSF is not responsible for the advice provided in this article.

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