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I am interested in how the bear catchers performs with 3X ETF's like TQQQ and TECL over 5, 10 , 15, 20 year periods but don't know how to run the screen. Folks are hesitant to invest in 3X ETF's because of the volatility. But if you look at the results over long periods they are tremendous if you have the stomach.

Has anyone ever looked into the results?

As a follow up, I have been running a Risk Parity strategy using TQQQ, TECL and TMF that has done well but I wonder if a timing signal like the Bear Catchers might improve the results or the Max Drawdown. Or, just hold TQQQ or TECL with a timing signal other than Bear Catchers?

I have been thinking about using the OFR Financial Stress Index as a timing signal.

Thoughts?

I am interested in how the bear catchers performs with 3X ETF's like TQQQ and TECL over 5, 10 , 15, 20 year periods but don't know how to run the screen. Folks are hesitant to invest in 3X ETF's because of the volatility. But if you look at the results over long periods they are tremendous if you have the stomach.

Has anyone ever looked into the results?

We are somewhat limited by the inception date.
TQQQ (3x) 2/9/2010. So all in a bull market.
QLD (2x) 6/19/2006 So it caught the 2008/2009 bear market. Where it got crushed.
Ditto TECL, 12/30/2008

I think that if you want to do these levered ETFs it is best to buy it and never look at it again.

I never have found a timing scheme that did much good. The huge drawdowns are just part of the game.

Problem is, we don't know if the return of these levered ETFs are just an anomaly due to tech stuff happened to doing really good at this one period of history.

There was a thought of BTAL/TQQQ, rebalanced annually or never.

There's a long thread on bogleheads about just this kind of strategy. Whole thing's worth a read:
https://www.bogleheads.org/forum/viewtopic.php?t=2...

It works great when ... it works great.
And it obliterates you when it doesn't.

If you’re interested in a comparison of alternative allocation strategies to minimize asset volatility the best single backtest comparison is at Allocate Smartly. They have backtested over 90 strategies and posted their critique for most of them. In a recent post they posted the 10 most popular TAA strategies their subscribers had chosen to use after subscribing.
https://allocatesmartly.com/the-10-most-popular-ta...

1 Financial Mentor’s Optimum3 19.0%
2 Hybrid Asset Allocation
Balanced (11.1%) and Aggressive (3.8%) 14.9%
3 Bold Asset Allocation
Aggressive (9.1%) and Balanced (0.8%) 9.9%
4 Financial Mentor’s All-Weather Quad Momentum 7.3%
5 Accelerating Dual Momentum
Original (2.3%) and Dynamic Bond (1.1%) 3.3%
Additional details of each strategy can be found on their Blog.

https://allocatesmartly.com/financial-mentors-opti...
https://allocatesmartly.com/hybrid-asset-allocatio...
https://allocatesmartly.com/bold-asset-allocation/

For a portion of my portfolio I personally chose two of their strategies that I thought were more robust, not over optimized, held up an alternate day of the month trading, and were based on completely different but rational concepts. Historically the blend I chose has done as well as a 60/40 in good times but does better than a 60/40 portfolio in down markets.

I don’t have any connections to Allocate Smartly other than a paid subscription.

I am interested in how the bear catchers performs with 3X ETF's like TQQQ and TECL over 5, 10 , 15, 20 year periods but don't know how to run the screen.

Here is a simulated 3 x Nasdaq test w/ BCC > 0.

https://tinyurl.com/NASx3BCC


It does great, if you don't mind an MDD within a rounding error of 100%.

BCC > 5 is a lot more user-friendly!

Baltassar

Worth a new thread!!

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