My goal here is to show you how easy it is to time the market. My method is ideal for managing your 401K, IRA, or simply to trade the market. I will offer two portfolios in real time. The first is for the conservative investor which has returned 14% annualy since 1994, the second is for an aggressive trader who has the ability to go short. One highlight I'd like to point out from my method is the very low draw down of merely 17% over the 12 years which I've tested it. compare that with the S&P500 who had a draw down of 48%. Trading costs will remain very low,as only three options are available long, or cash in the conservative portfolio and we add short to the aggressive portfolio. My research has showed that the best trading vehicles for this portfolio is the the NASDAQ 100 trust, the Russel 2K growth ETF, and the Russel 2k Value ETF. In the aggressive portfolio we will be trading the same ETF's but we will be able to go short. Please note that the aggressive portfolio is for only those who are willing to take on added risk, draw downs for this have averaged around 27% for the 12 years I've tested it on and results have improved to 19% annual return.
I will be tracking the conservative portfolio on Marketocracy so everyone can view it's performance over time. If anyone knows where I can set up a portfolio that allows me to go long and short please let me know so I can track the aggressive portfolio.
1 comment:
one way of comparing trading systems is to use what is called the "calmar ratio" and that is simply the maximum drawdown versus average annual return. A good system has a calmar ratio of 4 or higher, meaning the average annual return is at least 4x larger than the max drawdown.
If I read you correctly the average drawdown for your aggresive system is 27% and the annual return is 19%? This makes for a calmar ratio less than one, which obviously is not very good.
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