Rule-based strategies
Simple rules that move between stocks, bonds and cash, tested month by month from 1927 against holding on.
- US stocks, buy and hold
- 60/40, rebalanced monthly
- Stocks with a 10-month trend rule
- Stocks with a 10-month trend rule, bonds as the haven
- Stocks or bonds by 12-month momentum
| Strategy | Per year, after inflation | Volatility | Worst drop | Worst 12 months |
|---|---|---|---|---|
| US stocks, buy and holdOwn the whole US stock market and never sell. | 7.0% | 18.5% | -79% | -62% |
| 60/40, rebalanced monthly60% stocks and 40% bonds, restored to those shares every month. | 5.3% | 11.3% | -53% | -39% |
| Stocks with a 10-month trend ruleHold stocks while last month’s level is above its 10-month average, otherwise hold Treasury bills. | 6.6% | 12.6% | -50% | -29% |
| Stocks with a 10-month trend rule, bonds as the havenThe same rule, moving into 10-year Treasuries instead of bills. | 7.5% | 13.0% | -48% | -28% |
| Stocks or bonds by 12-month momentumHold stocks when their past 12 months beat Treasury bills and are positive, otherwise hold bonds. | 7.8% | 13.2% | -46% | -33% |
US dollars, 1927-07 to 2026-09, after US inflation. Signals use only information available at the previous month-end. Trading costs, taxes and the gap between a month-end signal and a real trade are not included. Past results are not a promise about the future, and nothing here is investment advice. Compare fixed portfolios in the backtest tool.