Want to get rich? Here's all you have to do: Buy 10 stocks. Hold them for six months. Sell and repeat.
If that sounds too good to be true and you want to stop reading now, I can't blame you.
But that would be unfortunate because this advice is a twist on a strategy that has worked really well for 5½ years, through hell and high water. Or at least war, recession and flood.
If you follow it in a low-cost trading account, particularly one in which gains compound tax-free, then there is a distinct chance -- though not a guarantee, of course -- that you could make serious, life-changing money.
Of course, you can't just buy any old 10 stocks. They've got to be the ones ranked at the top of the class by MSN Money's StockScouter rating system. You have to be ready not just to buy them at times when you think it is a terrible idea, but also be ready to sell when you love them so much you can't bear the thought.
The numbers don't lie
Is there a catch? Naturally. You are almost certainly going to have misgivings about the top-ranked stocks sometimes, not to mention the notion of putting your hard-earned money in the emotionless hands of a system.
Trust me on this. I came up with the idea for StockScouter in the middle of the 2000-02 bear market, helped to develop it with a crack team of independent financial engineers and have marveled at its success every day since. Yet even I still sometimes look at the top-ranked stocks and go "Naaah!"
Yet the numbers don't lie. (Actually, they lie just a little -- more on that later.) If you had followed this six-month-hold system on the top-ranked stocks since January 2001, you'd be up 26.1% per year since, on average, versus a gain of just 2.5% per year in the Standard & Poor's 500 Index ($INX) and 3.1% in the Nasdaq Composite Index ($COMP). That kind of return more than triples your money over six years, as you can see in this table: