I’ve decided that my current investment strategy for my RRSP investments of set it and forget it just hasn’t been performing very well.
The new strategy is one I got from my boss at work and it’s super simple.
I’m still open to taking on a lot of risk in my portfolio so I don’t mind putting all my eggs in one basket. The strategy sounds stupid but it should perform relatively well.
I will re-assess my investments once per month and move money into the top two performing funds (based on previous month’s performance) with a 50/50 split each.
It works because at a mutual fund or ETF level of investment you generally see the medium and long term trends very well. Sometimes growth stocks do well other times small cap stocks out perform the market. These ebbs and flows are seasonal and cyclical. Generally if small cap stocks are doing extremely well last month, they will likely continue doing well next month.
It will probably miss out on the highest performing investments but should give better returns than what I’ve done in the past.