Purchase a well-diversified index fund using either dollar cost averaging or as a lump sum purchase.
Short to indefinite.
Short-term market volatility risks exists, however, these are somewhat masked via the index diversification. As a long-term buy and hold strategy there is very little risk associated with this approach.
Many market pundits who profess individual stock picking will also acknowledge that this strategy works as well simply because the math behind it is so solid. Many of the blog posts written on this site also confirm this logic as well. One of the best articles I have found on this subject can be found here.
This strategy rotates between a well-diversified index fund (usually a benchmark) and individual stocks. The rotation between the index and the individual stocks occurs when the trader determines that the individual stocks are undervalued in relation to the index. At no time is cash held as an asset in this strategy.
Individual stocks are held for as long as the undervaluation is calculated. Once the individual stocks become equal in valuation with the index, or overvalued relative to the index, the stocks are sold and the index is purchased with the proceeds. At a minimum this strategy requires the individual stocks to be held at least T+2 days to avoid free rider violations. Since no cash is held at anytime this strategy does not support day trading for the individual stocks.
When the strategy is holding the diversified index very little long-term risk exists. Short-term risk still may exist, but downturns can be looked at as a buying opportunity for individual stocks used in the strategy. This is similar to the "Buy And Hold Diversified Index" strategy discussed above.
When individual stocks are purchased according to the strategy, idiosyncratic risks are introduced which must be accounted for in the stock selection analysis. This risk is exacerbated in relation to day traded stocks since the trader cannot sell the individual stock position for a minimum of T+2 (or T+3) days. To somewhat mitigate these risks, traders may elect to purchase the individual stocks using dollar cost averaging or setting a limit for the amount of time individual stocks are held regardless of their valuation in relation to the index.
This strategy is ideal for traders wishing to simply beat an index without spending significant time every day determining where to place their assets. Since most of the time the strategy will hold the benchmark index, traders can take their time in deciding when to jump into individual stocks they feel are undervalued. Unlike other benchmark beating strategies, "Selective Alpha Index Tracking" allows the trader to rotate between stocks as little or as much as they like without the risk of dramatically falling behind a gradually rising index.