„If you are in trouble, double”

Article by Simon Landt

How can a strategy known from gambling be applied to the capital markets? Our latest analysis examines the Martingale strategy, where losses are addressed by systematically increasing investments after declines. Using 25 years of market data, we illustrate under which conditions this approach can actually deliver higher returns than the traditional buy-and-hold strategy.

The analysis highlights both the potential benefits and the risks of this method. While positive effects can be achieved with broadly diversified indices, there are significant pitfalls to consider when it comes to individual stocks and limited liquidity. We also discuss how savings plans can help investors take advantage of market fluctuations in a disciplined manner.