Simple or Complex?
Your Success as an Investor Depends on Your Answer
Back in the fall of 2014, I stood on stage at a prestigious investment conference and asked the audience two questions:
“First, do you think financial markets are simple or complex?”
“Second, are the best investment strategies simple or complex?”
So, what do you think?
Well, financial markets are complex.
They include, and are driven by, more factors than you or I could possibly count: earnings (historical and expected), interest rates (absolute and relative), economic conditions (macro and micro), corporate leadership (which can’t be quantified), customer and investor “taste” (which is fickle as anything) … and on and on … and on…
Oh, and investor psychology, of course — which is ever-changing and, quite often, downright irrational. (We’ll talk about that more in a post to follow.)
So let’s agree that financial markets are indeed complex, and then move on to the second question I posed…
Are the Best Investment Strategies Simple or Complex?
If you answered “complex,” you’re in the majority.
Most investors believe complex investment strategies are superior to simple investment strategies.
At first blush, it’s a perfectly logical belief. After all, we’re dealing in complex financial markets, we’ve agreed. So why wouldn’t complex financial markets require complex strategies?
But as reasonable as this logic sounds … it’s dead wrong.
On the contrary, simple investment strategies are generally superior to overly complex strategies, despite what we force ourselves to believe.
It’s a truly twisted aspect of human psychology.
Far beyond the investment world, human beings are hard-wired to prefer complexity.
We prefer complex explanations, with all their flavorful nuances, over simple ones. We’re drawn to complex plot lines, with all their twists and turns, over simple, well-worn ones. And our minds, with all their creative powers, are constantly creating intricate tales … when reality is too mundane for us to enjoy.
Personally, I think it all comes down to stimulation.
Human beings love to be entertained … to be stimulated … and complexity provides that, where simplicity cannot.
That’s perfectly fine for leisure activities. If you prefer reading J.K. Rowling (complex language and storylines) over Hemingway (simple language and storylines) … it’s “no harm, no foul.”
But when it comes to investing…
Your success depends on appreciating simple investment solutions and, most importantly, sticking with them — even when they’re as unstimulating as watching paint dry.
That realization led me to what may be the simplest investment strategy ever created.
Introducing the 10X Switch
Over the next week you’re going to hear a lot about two things … market volatility and the 10X Switch.
The first is something that was still top of mind for me back in 2014 when investors were just getting back to even after the Great Recession…
And it’s more relevant today than it has been in years.
The second was my solution … how to take advantage of and profit from market volatility.
The 10X Switch is a simple investment strategy.
We trade just two tickers. Simple.
We’re always in the market. Simple.
When my model says “switch,” we switch positions. Simple.
But of course, “simple” doesn’t mean “weak.”
The 10X Switch strategy has shown the potential to generate massively powerful returns — if not in spite of its simplicity, perhaps because of its simplicity.
Starting in any random month since 2006, my analysis shows the 10X Switch has averaged a whopping 56% annual return…
With returns stretching as high as 2,200% over a five-year period — enough to 22X your money!
And since this strategy went live in 2016, its absolutely crushed the market by 40-to-1 by taking advantage of this recent spike in market volatility.
I believe the biggest profits are ahead of us for one simple reason…
I designed the 10X Switch to deal with the eventual return of huge swings in market volatility…
The kind we’re seeing right now and should see for months, if not years, to come.
Stay tuned to this page over the next week for additional insights as we build up to the big event on Thursday, May 14, at 8 p.m. EDT.
Chief Investment Strategist, The 10X Switch