Post #1405 by zeelotes on the Mechanical Investing board

Investment Strategies / Mechanical Investing ❤

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Ray wrote: Optimal leverage is about 2X.

Interesting you'd mention that. It is my primary strategy using QLD - 2x the Nasdaq 100.

Ray wrote: And, of course, don't use leverage in a bear market. :-) ;-)

Actually, I disagree. The vast majority of gains I've seen over the years came from investing in inverse ETFs during a bear market. They far outstrip the long gains in a bull market, especially gains had during a flat or relatively slow going bull market.

Ray wrote: do not compound your returns

This depends on where you are in the stage of life. For my tax-deferred accounts I have zero need of the funds so I let the magic of compounding have its way.

I'm glad to see someone adopts an approach like this. It is super simple to pull off, and produces remarkable returns.

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