A Quantum Leap in Financial Market Analytics

The core of any portfolio, the S&P 500 index is the benchmark index for equities in the United States.  Simply being on the right side of the market trading the S&P 500 alone will make all the difference in the world in your or your client's investments.  The model we've developed for the S&P 500 took years to perfect.  Our model uses the ETF 'SPY' during risk-on periods and the Vanguard Long-Term U.S. Treasury mutual fund 'VUSTX' and the Vanguard Intermediate-Term U.S. Treasury mutual fund 'VFITX' during risk-off (both funds are also available as ETF's 'VGLT' and 'VGIT').  An initial $50,000 invested in our model on January 1st 1997 (the first year reliable breadth data is available) would now be worth $1,527,365--an annual return of over 15.8%.  For buy-and-hold investors, their account would have a net profit of $206,356 as of April 5, 2020--an annual return of just over 7.2%.

What we consider most notable is its ability to limit drawdowns to just -11.2%, well within the risk-tolerance of almost all but the most risk-averse investors.  Buy-and-hold investors in the SPY would have been forced to experience two catastrophic drawdowns, the first following the bursting of the bubble, and the second during the financial crisis of 2008-2009 where the market declined over -55%!

To round out the statistics of the model for the quants, the model traded 54 times over the past 24 years, with 49 winners (90.74%) and 5 losers (9.26%).  The Compound Annual Return/Maximum Drawdown ratio, or CAR/MDD is an impressive 1.41. - The Leader in Quantitative Analytics
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