Demonstrating the effect of hedging by using various percentages of the long portfolio value. The simulation is for the period Jan-2-2000 to April-1-2014.
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iM-Best Combo3: Best(SPY-SH) + Best1(Sector SPDR) + Best(SSO-TLT)
Using our three ETF models, Best(SPY-SH), Best1(Select SPDR) and Best(SSO-TLT) equal weighted in a combination model, we demonstrate that the combo would have produced high annualized returns of 34.3% with a low drawdown of -12.9% and low volatility. Additionally, due to the very high liquidity of its component ETFs, the combo could support a huge portfolio size.
iM-Combo2: A Small-Cap Model in Combination with iM-Best(SPY-SH)
Using a third party small-cap model from the web-based trading simulation platform in combination with our iM-Best(SPY-SH), we demonstrate the benefits of combining this model with iM-Best(SPY-SH), these include a reduced volatility, constant positive rolling returns, and high annualized returns with low drawdowns. The model was chosen because its algorithm does not include market-timing, and also because it holds 50 stocks, has a low annual turnover, and should be able to support a relatively high total portfolio size of $3.5-million on its own.
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With reference to Section 202(a)(11)(D) of the Investment Advisers Act:
We are Engineers and not Investment Advisers,
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