The best system for the past three years was buying and holding, and for three years before that selling and holding or sitting it out. My wistful desire for a simple trading system is futile. That's why I try to overcome the normal human inertia of following the sheeple.
Michael Steinhardt of WisdomTree used to talk about this endeavor as developing "variant perception", his humorous name for sentiment. But now after 40 years he is into portfolio selection. Perhaps that's a natural progression as you get older and have amassed enough funds to require a portfolio instead of just winging it on speculative vehicles time after time, week after week, year after year.
The idea of dividend weighting an index or fund or portfoio is very simple. Most measures of business activity can be faked: sales, overhead, compensation, earnings, book value, etc., but it's hard to fake a dividend. It's there or it isn't, and its value is unquestionable. That's a fundamental "black box system". So weight your index or portfolio by dividend heft instead of by capitalization. Especially since so much of long term gains comes from reinvested dividends.
Here's just one of the twenty Wisdomtree funds' ten year index total return compared to its benchmark. The idea speaks for itself:
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