This article is a website version of our weekly FREE Best Ideas Newsletter sent on 18.04.2023. Sign up here to get it in your inbox every Tuesday.

Ever stumbled upon a fantastic investment opportunity that just didn't vibe? It's like finding a pair of shoes that look great but just don't fit comfortably on your feet.

The Investment I Couldn't Commit To

It recently happened to me. I stumbled across an article featuring a biotech company trading at a price lower than its cash value.

After scrutinizing the numbers, everything seemed to check out. I even sought a second opinion from a friend, who concurred. (Always remember to conduct your own thorough research).

However, when it came time to hit the buy button, I hesitated. Have you ever experienced this? Despite the compelling nature of the opportunity, I found myself questioning why I couldn't take the leap.

After much contemplation, I realized that this investment did not align with my instincts. It simply felt incongruent.

Defining My Investment Criteria

I came to understand that my preferred investment entails identifying high-quality undervalued companies with upward stock price momentum. This approach has been honed ever since I ventured into investing in 1987. It's a product of innumerable hours of research, reading, and rigorous back-testing. I even co-authored a book detailing the multitude of investment strategies we've experimented with.

As you may have heard, this is precisely the strategy we espouse in our newsletter.

Comfort Over Conformity

These were also the concepts elucidated in my article on identifying your optimal investment strategy – the one that truly resonates with you.

Here's an excerpt:

The most effective investment strategy does not necessarily involve

• the highest return,
• the lowest Sharpe ratio,
• the lowest maximum drawdown,
• the strategy currently outperforming the market,
• the strategy that performed best during the last bear market.

Your optimal investment strategy is:

• The strategy you can adhere to through thick and thin.
• The strategy that affords you peace of mind, consistently.
• It's the strategy that aligns with your nature and with which you feel comfortable.

(You can peruse the list of all the top investment strategies we've tested here: Quant investing – best investment strategies we have tested)

Harmonizing with Your Strategy

The reason for establishing this harmony lies in the fact that it will sometimes underperform the market, a circumstance applicable to all exceptional investment strategies.

Occasionally, this phase may extend over a few years.

The key is – only by aligning with your strategy can you persist with it through arduous times, and that is what you must do.

It's Not Just Any Strategy

Naturally, it cannot be any strategy.

It must be one:

• That has proven to be effective,
• In varied markets,
• Over protracted durations,
• During bull and bear markets alike.

But don't fret about finding the most complementary strategy, there are ample options to consider.

Perfection is Illusory

All strategies bear imperfections in their own right.

What we must do is convince ourselves that the strategy we've chosen is right for us (fall in love with it) so we can see it through prosperous and trying times.

You might discover that you need to reaffirm this frequently (I certainly do), especially during periods of underperformance.

Your guiding light in finding the optimal strategy for you, your congenial analyst

PS To discover exemplary companies that precisely match your investment strategy, click here.

PPS It's simple to overlook, so why not enroll now before getting sidetracked?

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