Japan (Nikkei): trend-following strategy vs buy & hold
Equities · tracked with iShares MSCI Japan ETF (EWJ)
EWJ holds large and mid-sized Japanese companies — the world's third-largest economy, with leaders in cars, electronics, machinery and trading houses. It is priced in US dollars.
Growth of 100 since 1996
buy & hold · total returnBuy & hold total return of iShares MSCI Japan ETF (EWJ). The Strategy Alpha results and live signal for Japan (Nikkei) are part of Plus.
What drives Japan (Nikkei)
Corporate reforms, Bank of Japan policy, global growth and the yen exchange rate.
How a trend-following strategy handles Japan (Nikkei)
Japan is the textbook warning against blind buy & hold: the Nikkei needed about 34 years to regain its 1989 high. Long secular trends — down and up — make it a revealing case for a trend filter.
Our Strategy Alpha applies the same simple, rules-based trend filter to every market: invested while the trend is up, in Treasury bills while it is down, checked once a month. It is not a forecast — it is a discipline that aims to keep most of the long climbs and sit out the deepest drawdowns.
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Educational content, not investment advice. Backtested results are hypothetical and do not guarantee future results. Disclaimer.