Chapter 5
The time horizon and the shape of strategy: keep it simple
Short-term investment strategies
For short-term investors, the safest strategy is to have 100% of their investments in Treasury bills. The “war chest” or “umbrella” fund might be considered a short-term fund (see Chapter 1). Short-term investors are absolute-return investors. Their focus is immediate and they have no need to hedge against risks in the future. Or, at a minimum, they are content to pass up the opportunity to hedge any such risks. Although the textbook benchmark against which success should be judged is the performance of Treasury bills, the reality is that achieving a positive investment return provides a line in the sand that matters above all else to short-term ...
