Finweek English Edition - - COVER STORY -

Si­mon Brown, colum­nist, in­vest­ment ex­pert and founder of Just One Lap, an in­vest­ment in­for­ma­tion web­site, started the Lazy Trad­ing Sys­tem, which tracks the up­ward move­ments of the four main in­dices on the JSE.

“We avoid the down­trends by buy­ing ex­change-traded funds,” Brown ex­plains. “The Lazy Trad­ing Sys­tem uses weekly charts to en­ter a po­si­tion on an in­dex that has to meet our cri­te­ria for mov­ing higher. Then we hold that po­si­tion un­til the trend re­verses. The Lazy Trad­ing Sys­tem’s hold­ing pe­riod could be as short as a few weeks or as long as three or four years, if the trend re­mains in­tact for that long.”

The Lazy Trad­ing Sys­tem only “goes long”, mean­ing that it only buys stock with the ex­pec­ta­tion that the as­set will rise in value.

“You will never short a po­si­tion (sell stock with the ex­pec­ta­tion that the as­set will fall in value). When mar­kets are weak, we move into cash to avoid the down­side,” Brown ex­plains. “We also only put a quar­ter of the port­fo­lio value into each ETF, which means we of­ten have a lot of cash sit­ting in the port­fo­lio.”

Ac­cord­ing to Brown, the most pop­u­lar ETFs have been the off­shore x-track­ers from Deutsche Bank, the lo­cal in­dices and the NewGold ETF, which tracks the rand against the gold price. “The best in­vest­ment has likely been the DBXUS, which tracks the US mar­kets and has re­turned 223% over the last five years,” he says.

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