No. of Recommendations: 4
you would have had to put up the cash to buy SPY. The futures contracts have a lot of built in leverage...So you're seriously suggesting that people should have
used leverage and made a risky bet buying a futures contract? Where that futures contract could have easily become a ticking time bomb and expired worthless? And you would recommend buying that contract (which could easily have gone to zero dollars) over simply buying and holding an S&P 500 index ETF?
There's a reason why Warren Buffett called futures and derivatives "
financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal".
https://www.investopedia.com/terms/d/derivativesti... Not to mention that current S&P valuation levels would not have been predicted by any sane person. In the last few years almost any investment strategy looked dumb compared to holding the S&P. Sadly that wasn't knowable in advance.Why do you constantly need to predict where the market will be next year or two years from now? Why not, instead, just dollar cost average into into it during your wealth building years? And then when you hit your retirement number, split up your portfolio to a 60:40 allocation, adjusting that ratio as the years progress? Hundreds of thousands of people have become wealthy and stayed wealthy this simple way.
A couple more quotes from Warren:
"I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month, or a year, from now."
"In my view, for most people, the best thing to do is own the S&P 500 index fund," Buffett had once said. "The trick is not to pick the right company. The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low-cost way," he further added.
https://finance.yahoo.com/news/warren-buffett-beli... Overall four-year CAGR for the [YIELDEARNYEAR] strategy: 42.6% versus S&P 20.1%. Presumably with a lot less risk of permanent capital loss..I can't duplicate your results. I used gtr1 to backtest YieldEarnYear using SI Pro data during 4/1/2020 through today (top 10, rebalanced monthly). I found that its CAGR during this period slightly underperformed the S&P 500.
Statistics are calculated from 20200401 to 20241218 over daily closing portfolio values for all 21 trading cycles of Variant 0.
YEY_SI_Pro S&P 500
========== ========
CAGR: 21.6% 22.2%
SAWR: 15.9 15.8
Ulcer: 7.9 8.3
MDD: -26.7 -24.4
Sharpe: 0.91 1.2
Total ret: 152.5 156.7
2020 31.4 54.2
2021 38.1 28.3
2022 1.3 -18.1
2023 8.3 26.4
2024 27.5 25.2
http://gtr1.net/2013/?!!QlpoMTFBWSZTWR5fJ3gAAV!2Ff...
