Systematic Investing: Strategy Versus Tactics

You’ll probably laugh at me… but on Monday, while most people enjoyed a day off from work, I got engrossed in a book about value investing through a “systematic” lens.

Systematic investing is often misunderstood.

By whatever name — quantitative, algorithmic, non-discretionary or rules-based — the idea of systematic investing sometimes conjures images of “black box” computer programs driven only by electrical impulses… instead of fundamentally robust investment philosophies.

But that’s a misnomer. Computers, databases and statistically sound algorithms can only refine the discovery and implementation of a fundamentally sound investment strategy. At the end of the day, computer algorithms or not, you still need a rock-solid investment strategy.

Case in point is the book I was reading…

Basically, the author was using time-honored value investing strategies – those preached and practiced by none other than Warren Buffett and Benjamin Graham – with systematic, rules-based implementation.

To use a war analogy, value investing was the strategy, while a mechanical rules-based system was the tactic. Taken together, the approach showed its ability to outperform passive index investing over the course of many decades and through various market conditions (i.e. bull markets and bear markets alike).

The point is, it wasn’t some esoteric and complex algorithm that allowed for market-beating returns… it was a fundamentally sound investment strategy: “value.”

The “systematic” implementation only contributed additional, icing-on-the-cake type of benefits, namely efficiency of data processing and mechanisms that prevent emotions-driven decision-making.

More so than ever, I believe that a rules-based approach to investing is a must-have for any serious go-it-alone investor. And, of course, that’s exactly what I aim to provide in Cycle 9 Alert.

Adam-ODell2

Adam

Why Winners Keep Winning (And Losers Keep Losing)

If “buy-and-hold” and the notion that you can’t beat the market have left you short of your personal and retirement goals, then you’re going to want to hear the truth about passive and active investing.

Chances are if you’re more than 25 years old, you think it’s impossible to “beat the market!” But you CAN beat the market… you just need to use the right strategy! Find out more in our new report from Adam O’Dell,, Why Winners Keep Winning (And Losers Keep Losing)!

LEARN MORE
Categories: Investing

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.