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How to Value Shares and Outperform the Market by Glenn Martin

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11. Medium-risk, High-return Strategy

Over the 27 years from January 1984 to December 2010, the medium-risk strategy outlined here has delivered a real return of 6.3% p.a. (10.17% actual p.a.) using ShareMaestro’s FTSE100 valuations and the associated buy and sell signals. This is a considerably higher return than you would have achieved from most commercially managed funds. Over the decade to December 2010, the return achieved from this strategy was over double that achieved by the median-placed commercially managed equity fund.

The principle of the strategy

The basic principle of the strategy is to buy into the FTSE100 when the price is good value and to switch into instant-access cash when the price becomes poor value. Because of the ...

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