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WINNER in the “Business: Personal Finance/Investing” category of the 2014 USA Best Book Awards

Dual Momentum Investing details the author's own momentum investing method that combines U.S. stock, non-U.S. stock, and aggregate bond indicesin a formula proven to dramatically increase profits while lowering risk. Antonacci reveals how momentum investors could have achieved long-run returns nearly twice as high as the stock market over the past 40 years, while avoiding or minimizing bear market lossesand he provides the information and insight investors need to achieve such success going forward. His methodology, supported by rigorous academic research, is designed to pick up on major changes in relative strength and market trend.

A better way to invest

October 27, 2014

By Gagandip Grewal

I have been following Garys work for almost 3 years now while researching several trading systems. He has been very helpful responding to all my questions and Ive learned a great deal from him. It was especially nice to read about Garys interesting finance career in this book. His network, experience & education made him the right person to discuss the wide range of topics & history he covered.

As the name suggests, this book is about Momentum Investing: the idea that markets with strong relative strength continue outperforming in the short-term while weak markets continue to underperform. The author makes a very compelling case for why momentum is the premier anomaly for outperforming the broad market indices.

He does this with a logical flow of ideas that are backed with a great deal of research every step along the way. The book starts by building a foundation with history and finance concepts, then explores all the various funds and alternative strategies out there before discussing what momentum is in detail. By looking at the alternatives, the reader appreciates why momentum stands out.

The author has an excellent writing style. Finance books can get very dull, but Garys humor and storytelling made the book enjoyable to read. Here is a summary of what I took from this book:

In Chapter 1, Gary acknowledges that indexing beats the average investor since it is more diversified, disciplined and lower cost. This helps supports the idea that markets are efficient. However, while its hard to beat indexing its not impossible. You just need a systematic approach (to remove your emotions) thats been thoroughly tested and minimizes costs. Chapter 2 shows this with a historical tour of traders that successfully used momentum to generate excess return for over a century.

Chapters 3-4 discussed concepts from Modern Finance in detail, which can be tough to follow if you dont have a finance background. I really enjoyed the discussion of Behavorial Finance in chapter 4. Investors emotions cause them to buy and sell at the wrong times and are largely what cause markets to be inefficient. Anomalies like momentum should persist as long as humans have emotions.

Chapters 5-6 discussed the investment landscape. It was shown that stocks have been the best performing asset class (especially US equities) followed by bonds. Gary then discussed other vehicles such as mutual funds, hedge funds and alternative strategies such as smart beta. It was shown how these vehicles have (on average) underperformed market indices. The number of vehicles and strategies out there today is mind blowing. These 2 chapters can save readers years of frustration.

Chapters 8-10 discussed the Dual Momentum strategy. Gary explained in detail what absolute vs. relative momentum is, how using both enhances his strategy and all the variations to his method that he explored. Backtest results for all permutations were presented in clear, organized tables & charts.

In closing, dual momentum is a premier investment strategy with these benefits:

- 17% CAGR with a 0.9 Sharpe Ratio over last 40 years

- Robust in all market environments (up, down, sideways)

- Persistent over long-run (excess returns since 1800s)

- Systematic (eliminates your emotions and second-guessing yourself)

- Very easy to implement & requires little time (simply glance at one chart, once a month)

- Highly diversified: Uses broad-market ETFs, eliminating company-specific risk

- Ultra low cost: Uses very liquid ETFs (low bid-ask spreads) with low MERs (