Better Than Easy (Way Better)

June 24, 2024

I don’t mind people who use index funds.

Nothing wrong with that.

It’s easy and it’s better than nothing. Sometimes it’s a lot better than nothing.

I do mind influencers trying to tell us that index funds are the ONLY way. They’re clearly not.

I do mind influencers trying to tell us that index funds are the BEST way. They’re obviously not.

If someone wants to do index funds because it’s the only thing they have the bandwidth to do, that’s great.

Walking every day is better than not running 30 miles a week. Doing five pushups every day is better than not doing five sets of bench presses at 185 lbs.

However.

To say that walking will get you to the Olympics or that five pushups produces world records is ludicrous.

And misleading.

And possibly harmful.

So, this week we’ll take a look at this. There’s a chance I’m wrong.

Right?

One one hand, here’s the index-fund-only strategy from last week. Once again we’re using DCA and once again we’re using dollar amounts that might be possible for anyone. Here’s that methodology again:

The Dollar Cost Averaging (DCA) SPY Strategy

• Start with: $1,000.
• Add automatically via automatic transfers: $100 per week (or $400 per month).
• That’s it.

If we started doing this simple thing in June 2019, we would definitely see our nest egg grow:

We started with $1k, added $100 a week (or $400 per month), and voila. We now have $39k.

Most of that is our money, of course, but that’s still about a 15% gain on our money per year.

Hooray.

But let’s say we wanted to do better.

And we know that trading systems (almost) always beat index funds. So let’s do that.

Here’s the system we’ll use. It’s also very simple:

The Buy on Monday 5-Minute YM.D (E-Mini Dow) System 

• Buy on Monday at 13:50 pm ET.
• Close out at the same time as entry on Wednesday if we haven’t hit our target.
• Target is 1.5x the ATR.
• Stop is 20x the ATR.

We’ve looked at systems like this before but the Dow (YM) is much milder than the others. It’s more conservative.

The problem, though, is that Futures uses a lot of leverage. So we’ll have to use the Micro E-Mini Dow, which is MYM.D, if we want to start with a small amount of money.

This system is very similar to being Long-Only in the market because it’s using an index and only going Long.

But it’s a system, so it has a chance to be better.

Will it be?

We’ll take a look at the results in our next Newsletter.

Talk to you soon.

Join the free Newsletter list here .

Get Robot information HERE.
Visit my Performance Page HERE.
Buy my new book HERE.
The Inevitability of Becoming Rich is HERE.
My latest YouTube video is HERE.

Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.