Nov 22, 2012

Investment Strategy Generating Over 25% Annually



Using trading strategy is always good attitude in order to eliminate emotional trading which can harm your portfolio. The CapitalHubs High Yield strategy has the following characteristics: 

  • In the strategy is used leveraged S&P EFT - SSO (ProShares Ultra S&P500). Trading the broader market ensures high diversification.
  • Underlying leverage boosts the profitability of the strategy since the last is based on short term holding period, trading on signals generated in oversold markets and target return of every trade at 15%.
  • This strategy ensures time limited market exposure and hence market risk, higher probability for winning trades and heightened profitability
  • Ste strategy does not use stops, ensuring that the target is always hit on profit and avoiding loss capitalization during the volatile recovery

Strategy back test for a period of 4 years, starting the beginning of 2009 shows following outcomes: 

  • Return on capital invested over the period (4y): 93.23%
  • Sharpe ratio: 2.74
  • Win/Loss ratio: 100%
  • Number of signals: 6
  • Risk: High (max day drown: 37%),
  • Market exposure (in days) 95 out of 1460 (4y) or 6.5%

Compared to traditional buy and hold strategy the yield over the period is pretty much the same, however the exposure to the market (the market risk) is considerably lower (6.5%) compared to the 100% of the time invested in classical buy and hold. In essence, this investment style gives buy on dips generated signals directly to your mail, low market exposure (time related) and 100% winning trades. 

Try CapitalHubs High Yield strategy*

Here is visualization of the mentioned investment style:
 
*Because of a system limit of 10% per position multiply outcomes (max day drown) by 10 to get the result of fully invested portfolio of $100 000. As SSO represents the broad market (S&P500) the fully invested portfolio is considered to be diversified.

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This work with autor CapitalHubs.com is licensed under Creative Commons 3.0.