Convergence to long-term trends

The trading strategy of this portfolio is based on the observation that a stock tends to fluctuate around a long-term trend. This long-term trend is mainly determined by megatrends (e.g. digitalization, urbanization, globalization, health and longevity). Analyzing the impact of these megatrends on the economy/businesses allows to calculate the long-term trend of a stock. Knowing this long-term trend implies that predictions about the future performance of a stock can be made. For instance, whenever the current stock price of a company is below its long-term trend, an increasing stock price is expected. Hence, the stock is intended to be bought. As soon as the stock has sufficiently converged to its long-term trend, it is intended to be sold. Depending on the rate of convergence, the investment period can either be short-, medium-, or long-term.