Tuesday, October 30, 2012

T 9..An Aside...10.30.12

Just for fun here's a rotation model using 9 ETFs and it rotates into the top 7 on each Monday.  The model is based on weekly bars and what's attractive in this version is the total drawdown numbers...almost too good to be true...max continuous drawdown = 3.9% !!!.

T9 only returns 25% over the past 4 years, basically equal to SPY but it been a whole different investment experience than holding the volatile SPY. 
These models are vest suited for IRAs and other capital appreciation accounts where risk management is a primary concern...still...the returns are about 10X better than the average CD.

To save you some time figuring it out, I've culled XLE and IWM from the T3 mix to come up with the T9 components.
Although both XLE and IWM have had extended runs in the top 3 slots at T3, that comes with a price...volatility... that can turn into a double edge sword when the markets get bearish or when news drives XLE wildly up or down.  The T9 portfolio just calms things down a bit.