My New Favorite Portfolio Beats the Market by Over 300%

My New Favorite Portfolio Beats the Market by Over 300%

May 3, 2024

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This week we’re talking about the Holy Grail of Testing.

Which is simply watching our system trade for 6-12 months.

Nothing beats having an Evaluation Period. And it’s not a new concept. It’s always been this way.

And in our last Newsletter, we looked at a system on Gold (GC) that I developed years ago. Since then, I haven’t touched it.

And it’s done pretty well. Here’s that Curve again:

It lost in 2023 but it’s produced a monstrous amount of hypothetical profit so far in 2024.

But here’s what I’m thinking.

Typically, Gold moves opposite of the stock market, right?

If stocks are tanking, people move to Gold for a “store of value”, or something like that.

It’s not always the case, but it’s often the case: when one goes up, the other goes down.

So, I wrote some simple code that buys the SPXL ETF (the S&P 500 on steroids) on the 1st of the year and exits at the end of the year. No other filters. No other rules.

I simply want to buy and hold the market (with leverage) each year in the hopes that a bullish market will complement my breakout system on Gold.

Did my idea work?

Using Portfolio Architect, here is that two-instrument portfolio trading $10k of stock each time and 1 GC contract on a sample $22,000 account since 2009:

The portfolio shows a gain around 1,000%.

Here are the Annual Returns:

A few things to notice.

One, the data on SPXL only goes back to 2009, so results before that are Gold only.

Two, 2013 was a monster year, hypothetically returning $41k on a possible $22k account.

Three, this is my new favorite portfolio.

Very soon, I’m going to pick a new portfolio or two and take them live.

This is one of the candidates.

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.