Thank god for black gold: the awful investing strategy mounts a comeback

We're now in month 3 of my quest to prove the conventional investing wisdom wrong, and things are looking up. 

Back in July, I set myself the quixotic task of trying to prove that chasing trends was a viable investing strategy and gave myself six months, and a hypothetical $10,000 portfolio, in which to do it. 

As a refresher, the rules are arbitrary but simple:

For the rest of the year, my hypothetical $10,000 portfolio will go all-in on a single thematic ASX-listed ETF at the start of each month.

I'll pick the theme that I think is generating the most hype at that moment in time, based predominantly on recent performance, i.e. which thematic ETF has performed the best over the last month. But I'll also take into account certain macro factors, media coverage and market sentiment.

At the end of each month, that ETF is then sold and the capital fully reinvested in a different ETF that captures the next trending theme. 

After going from bad to worse, we're back to simply being bad thanks to surging oil prices. Here's how the portfolio got on in August and where its investing next.  

Month 2 recap

As I wrote a month ago, the portfolio went from bad to worse early in month two. 

After oil surged following the resumption of strikes in the Middle East, I piled the portfolio into Betashares Crude Oil Index Currency Hedged Complex ETF (ASX: OOO).

On 1 August, I purchased 909.77 units of OOO at a price of $8.19. Unfortunately, a few days later, the oil price crashed on news that peace talks had resumed.

To the relief of my portfolio, that didn't last. By the end of the month, oil had surged back to almost US$90 a barrel.

It meant OOO ended the month at a price of $8.85, giving me a respectable 8% return for the month, and taking the portfolio's value back to $8051.46. It's not where I'd like it to be, but it's a step in the right direction. 

This month's investment 

Alongside the Iran War, the other big macro story of the last month has been the unfolding government debt crisis. Long-dated government bonds are at decades-long highs across much of the developed world, and one key beneficiary has been gold.

And that's why our next investment will be the Betashares Global Gold Miners Currency Hedged ETF (ASX: MNRS), which tracks the world's largest gold miners, ex-Australia, and which returned 30.5% in August. 

On 1 September, I used the portfolio's remaining $8051.46 to buy 519.11 units of MNRS at a price of $15.15. 

Given the debt crisis doesn't look like it will be resolving itself anytime soon, I'm feeling confident that the gold trade can continue to deliver in the month ahead. 

I've been wrong before.