If you’re looking to adopt the Dual Momentum investing strategy, having the right tools is essential for tracking market trends, comparing asset classes, and executing timely trades. With dual momentum’s focus on relative and absolute momentum, the tools you choose should help you analyze performance data, identify signals, and automate your decision-making process. In this article, we will explore some of the most useful tools and platforms for investors who want to successfully implement dual momentum in their portfolios.
1. Spreadsheet Software (Excel or Google Sheets)
For investors who prefer a hands-on approach, using spreadsheet software like Microsoft Excel or Google Sheets is an excellent way to track momentum data manually. With the right formulas, you can calculate both relative and absolute momentum for various asset classes over different lookback periods. Some of the key features include:
- Historical Data Analysis: You can import historical price data for various asset classes such as U.S. stocks, international stocks, bonds, and commodities.
- Relative Momentum Calculation: By comparing performance over a set period (e.g., 12 months), you can easily rank assets based on their returns.
- Absolute Momentum Triggers: Set up conditional formatting or alerts when an asset’s performance falls below the risk-free rate or when it underperforms against historical averages.