Strategy 1
The Core (70-90% of your capital): The Foundation of Wealth
🎯 Investment Philosophy
This portion of your portfolio is not for "trading." It's for investing. You are buying and holding a piece of the entire global engine of capitalism. Don't touch this part based on daily news or fear.
Strategy: Dollar-Cost Averaging (DCA)
Execution: Every week, every two weeks, or every month, you buy a fixed dollar amount of VT. No matter what. Market is up? You buy. Market is down? You buy, and you're happy you're getting it on sale.
Psychology: This removes emotion. It automates discipline. Over decades, this is the single most reliable way to build serious wealth with a broad index. You are harnessing the long-term upward drift of the global economy. This is your anchor.
Strategy 2
Enhance with Trend-Following Signals
What: Use simple technical indicators to adjust your DCA strategy, increasing exposure during bullish trends and reducing it during bearish trends.
Why: While DCA is effective long-term, trend-following can help avoid large drawdowns during market downturns and enhance returns during uptrends.
📊 Primary Indicator: 200-day Simple Moving Average (SMA)
Use the 200-day simple moving average on VT's price chart. This is a widely followed indicator for identifying long-term trends.
Buy Signal: When VT's price is above its 200-day SMA, increase your DCA allocation (e.g., invest 1.5x your normal amount) to capitalize on upward momentum.
Reduce/Hold Signal: When VT's price falls below the 200-day SMA, reduce your DCA allocation (e.g., 0.5x or pause new purchases) and hold cash or shift to safer assets like short-term bonds.
📈 Secondary Indicator: Relative Strength Index (RSI, 14-period)
Monitor the RSI to avoid overbuying in overheated markets.
RSI > 70: Consider scaling back purchases slightly, as the market may be overbought.
RSI < 30: Consider increasing purchases, as the market may be oversold.
Use weekly or monthly charts to avoid noise from short-term fluctuations.
Strategy 3
Macro-Economic Overlay
🎯 The "Chess Master" Approach
Use your understanding of the global economy to front-run the major trend changes that the technical indicators will eventually confirm.
Concept: Trade based on the major macro drivers: central bank policy, inflation, and economic growth cycles.
Key Factors to Watch:
🏦 The Fed & Global Central Banks
Are they hiking interest rates (bad for stocks) or cutting them (good for stocks)? Don't fight the Fed.
📈 Yield Curve
Is the 10-year/2-year yield curve steepening (good) or inverting (a classic recession warning)?
😰 VIX (The "Fear Index")
Spikes above 30-40 often mark moments of maximum panic and are historically excellent long-term buying opportunities.
Execution: You use this macro view to give you a bias. For example, if you know the Fed is about to start a rate-cutting cycle, you will be much more aggressive in buying the dips because you have a powerful tailwind. If the yield curve is inverted and manufacturing data is weak, you'll be much quicker to sell on a break of the 200-day SMA.
Strategy 4
Tax and Cost Efficiency
What: Minimize taxes and fees to maximize net returns.
Why: VT's low expense ratio (0.08% as of 2025) makes it cost-efficient, but trading costs and taxes can erode returns.
💰 How to Maximize Efficiency:
- Trade in tax-advantaged accounts (e.g., IRA, 401(k)) to defer capital gains taxes.
- Avoid frequent trading to minimize transaction costs and short-term capital gains taxes.
- Use limit orders to buy VT at or below the current market price to avoid overpaying.