Beat the Market with the Relative Strength Strategy: Smarter Investing in Just 10 Minutes a Month
If you’re relying on passive, buy-and-hold investing strategies, you might be leaving serious performance on the table. The Relative Strength Strategy offers a dynamic, evidence-based approach to help you outperform the market—without spending hours managing your portfolio.
→ YouTube Weekly performance updates
Subscribe to receive our model stock/fund picks to your inbox
Subscription includes 2 strategies: Relative Strength & Weekly Reversion
What Is the Relative Strength Strategy?
At its core, the Relative Strength Strategy is based on a simple but powerful concept: “strength begets strength.” Assets that have recently performed well tend to continue outperforming in the near term. By tracking momentum and ranking assets based on relative performance, this strategy systematically shifts capital into market leaders.
Why Momentum Investing Works
The strategy isn’t just theory—it’s backed by decades of academic research. Studies by Jegadeesh & Titman (1993) and Moskowitz & Grinblatt (1999) show that momentum-based strategies consistently outperform due to common investor behaviors like underreaction, herding, and trend-following.
The Relative Strength Strategy captures these inefficiencies with a rules-based, repeatable process. There’s no need for economic predictions or guesswork—just smart, tactical allocation based on measurement of relative strength.
How the Strategy Works
- Ranking mechanism: Assets are ranked using approx 1-year rate of change (ROC) measure.
- Monthly rebalancing: The top three ranked assets are selected and equally weighted.
- Trend filter: Positions are only held if the asset is in an uptrend.
- Market risk management: If the S&P 500 is trending down, exposure across all positions is reduced by 50%.
Broad and Diversified Asset Universe
The strategy evaluates over 150 funds across 50+ asset categories. These include:
- U.S. and international equities
- Bonds
- Commodities
- Real estate
- Inverse and defensive ETFs
This diversified universe allows the strategy to adapt to changing market environments, whether it’s a booming economy or a bear market.
Performance
Equity Curve Versus Benchmark
The Relative Strength Strategy has been backtested from 1991 through April 2025. The results show consistent outperformance compared to the S&P 500, with significantly lower drawdowns. That means higher returns with less volatility.
Monthly Performance Table
this table is updated at the start of every month
Performance and Risk Statistics
Implementing the Strategy
Once a month, you receive an email with model allocations. Simply place trades the next day to match the model weights. The entire process takes about 10 minutes—no daily monitoring, no emotional decision-making.
Sample Allocation Example:
- 33.33% Fidelity Select Gold Portfolio (FSAGX)
- 33.33% Fidelity Select Banking Portfolio (FSRBX)
- 33.33% SPDR Gold Shares (GLD)
Key Benefits
- Outperformance without prediction: Rotate into strength without needing to forecast markets.
- Rules-based discipline: Eliminate emotion and guesswork from investing.
- Low time commitment: Manage your portfolio in minutes per month.
- Adaptable and tactical: Adjusts to market trends automatically.
Ready to Start?
This strategy was designed to make active investing simple, efficient, and effective. If you’re looking to beat the market while spending less time worrying about it, the Relative Strength Strategy could be your edge.
FAQ:
How to Subscribe?
We use the infrastructure of a service provider called ‘Kit.com’ to do a monthly email blast to subscribers. Once subscribed, you will start receiving the monthly newsletter into your inbox on the last night of every month with the updated fund/ETF picks plus a review of prior picks and a performance summary.
Subscribe to receive our model stock/fund picks to your inbox
Subscription includes 2 strategies: Relative Strength & Weekly Reversion
How to Cancel?
Canceling your subscription is easy. Click on the ‘Update your profile’ link that appears at the bottom of every subscriber email we send out. Then on the ‘Update your profile’ page click on the link ‘View billing in Stripe’. Then on the Stripe billing page simply click ‘Cancel plan’.
Does Returnstream Trade this Themselves?
Yes! I trade this in my personal account and show screenshots of my brokerage account balance in my weekly update videos.
I Work During the Day. Can I Still Trade This?
Yes! This is a once a month strategy & it is not very sensitive to trade execution. You may place orders at night or before market open in order to get filled any time during the day.
I signed up after the monthly signal was sent. Do I have to wait until next month to get signals?
No! Just send me an email and I will send you the current signals.
