Fixing and Thriving With the Easy Strategy

June 21, 2024

In our first Newsletter this week, we used a very easy strategy and it worked nicely.

It actually looks like the closest thing to “guaranteed” money we can possibly find.

And then we looked at a period in the market that struggled.

And our easy strategy struggled mightily.

Here’s that strategy once 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.

And here’s that horrible report from 2006-2008 again:

We contributed $14,000 of our own money and ended up with only $11,000 after three years.

That’s awful. Can we fix it?

Yes.

All we have to do is not use an index fund. 

Instead we’ll use the most famous monthly-dividend-paying REIT in the world, Realty Income (O). If we used a high-yield instrument instead of burying our heads in the sand, here’s what would’ve happened from 2006-2008:

Our $1k investment hypothetically grew to $16k–and we only put about $14k of our own money into it.

As you can see above, we made about 2% per year on our money while an index fund set it on fire.

Remember: there’s nothing that says that an index fund is the only way to go.

However, if that didn’t matter–if we were in it for the long haul with our Easy Strategy–then here’s how using SPY from 2015-2024 would’ve done:

If we can shrug off long periods of terribleness, then this strategy would’ve thrived, turning $1,000 into $87,000 for an annual rate of return over 12%.

While it might not be the best we can do, it’s definitely the easiest thing we can do.

And anyone could start doing it right away.

Talk to you soon.

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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.