The most important task a prospective rule-based investor should undertake is to back-test his proposed strategies.
In order to back-test, the investor must obtain sufficient and accurate historical data for the instruments he intends to trade.
The aims of this chapter are–
- To emphasise the importance of obtaining historical market data going back as far as possible.
- To show the impact of dividends on overall return and to stress the need to obtain dividend data for stock indices.
- To explain the elements of commodity investment returns and the need to build commodity indices for back-testing.
- To help the reader overcome some of the frustrations he will encounter and to point in the direction of possible data sources. ...