Dual momentum: US stocks, world stocks or bonds
Gary Antonacci's rule: hold the stronger of two stock markets, but only if it beats cash. Otherwise hold bonds.
The rule
Once a month compare the 12-month returns of US stocks and foreign stocks. Take the stronger one, but only if it earned more than Treasury bills. If not, move to bonds.
Why people use it
It joins two effects: the stronger market tends to stay stronger, and a market that loses to cash is often in a downtrend. One position, a few trades a year.
Where it hurts
A 12-month window is slow: it leaves late and returns late. Being all-in on one asset, every wrong switch hurts in full.
How our bot runs it
The bot compares SPY (US), EFA (developed markets outside the US) and BIL (bills) over 12 months. If SPY beats BIL, it holds the better of SPY and EFA; otherwise AGG (broad US bonds). Reviewed on the first trading day of each month.
Live account
A virtual $100,000 account that follows this rule. Every trade is on the bot's page.
| Bot | Account | Return |
|---|---|---|
| Dual momentum | $99,863 | −0.14% |