I have a new signal in one of the asset classes!

Its the end of the year, New Years Eve. I hope that you have enjoyed Christmas and will celebrate the New Year with friends and family.

Photo by Richard Masoner (via Flickr)

The headlines are full of reports about stock markets being at record highs and therefore possible over-priced. Will there be a crash soon, or not? Should I invest in the stock market, or not? This is the dilemma faced by many investors who do not have a strategy.

I do have a strategy: Firstly, to monitor all of the asset classes in order to spread my risk. Secondly, to invest in an asset class when it starts to rise in price. Thirdly, to liquidate the investment when it falls below a certain point, and return that investment to cash, and wait for the cycle to repeat itself.

Simple? Well, it's simple in theory, but harder in practice, because of the emotions of fear and greed.

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Happy New Year!

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