The Dow and Nasdaq Portfolio

July 19, 2024

In our last Newsletter, we talked about using a system on tech (the NQ).

The nice thing is that we can start doing this anytime.

(I wouldn’t recommend getting started immediately buying a tech stock or the QQQ.)

The other nice thing is that it allows us to capture the high potential upside of the Nasdaq in coming years.

The bad thing is the usual thing.

The losing.

Our breakout system on the NQ.D has losing years. Here are the Annual Returns via Portfolio Architect:

Nothing out of the ordinary. Nothing different than a beloved index fund.

But losing nonetheless.

Can we fix it?

Maybe.

How?

By adding a system that trades the boring, out-of-date, out-of-touch Dow Jones (YM futures contract).

These two instruments definitely aren’t related. They travel in completely different worlds.

Especially these days.

So does adding our Buy on Monday YM system make anything better?

Here are the Annual Returns if we trade 1 contract on both the NQ breakout and the YM Buy Monday via Portfolio Architect:

Whoa, that’s a significant improvement. There are losing years, but they’re tiny.

And the winning years are big.

Here’s the Curve since 2001 on a $32k account via Portfolio Architect:

It’s way more calm than going all-in with the NQ by itself.

And compounding would obviously make it even better.

It appears that using the Dow and Nasdaq together can be effective.

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.