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03-03-2021, 06:07 AM
(This post was last modified: 03-03-2021, 06:19 AM by fenders53.)
In any event it seems to validate the general strategy is sound. The only thing I can think of that would be different than the backrest period is a FED prone to interferring in the bond markets, and the fact that all bonds have a notably lower yield. The hedge component may or may not perform as effective as historical. Only one way to find out for sure. You can't account for every unique occurrence.
And of course the obvious flaw that everyone points out. A sharp drawdown very early in the month that pushes you out of the risk on ETFs after taking the port down. 2020 offers hope that even whipsaw market action doesn't necessarily derail the strats that severely.
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03-03-2021, 06:26 PM
(This post was last modified: 03-03-2021, 06:27 PM by fenders53.)
I will make that one of the core strats I play. In numerous articles the past few years David repeatedly advises the aggresive to make the convertibles the core strat and add the leveraged stuff very sparingly. Some of his subscribers using a 3:1 ratio lost nothing MAR 2020. I can't say that was my DGI or put selling experience lol.
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Thanks for the chart and the back tests Mike. I'm inclined to believe data from 2001 to present is most relevant. The money printing started, and rates weren't 12% or 0%. What you posted lends confidence. I am annoyed when anybody offering services for pay offers up a 2011-present chart and implies "you just can't help but get rich".
On another note, the hedge is important. When rates were higher an investment grade LT bond might rise 10% while your stocks are dropping 15%. I'm less confident this works quite as well. Honestly, it just needs to be somewhat effective. It's not reasonable to expect short term guarantees in an investment vehicle proven capable of 12%+ returns. I'm sure you realize it's the extended black swan I am wary of. Nothing is guaranteed but I want the chance of that to be very low. And I don't want to be babysitting it waiting for a trigger that might happen today or two weeks for now. What is really causing this is I've lost confidence in buy and hold forever unless valuations are much lower than they are currently. I'm not putting all my eggs in that basket this close to retirement. Especially when it almost requires me to hold 30 stocks when I rarely have more than 10 good ideas.
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I've made my decision after I dug in as best I could. I see guys considering tweaking their strategies due to current sentiment regarding this index or that's near-term prognosis. I am going to do a 60 day free trial on all of David's strategies. It's not too expensive to continue if I decide to. I'll be able to see if he is sticking to his plan or not in this bizarre 20/21 market. I hope you won't mind having a look at the materials I will have access to. We'll see if he still has confidence in his version of these strats. After a couple of years, I'm comfortable he won't disappear from the internet. He never stopped sending me trigger data after I purchased a $4.95 Kindle book over two years ago.
