Why would you deploy that strategy when the beta it’s probably 1 or just slightly higher instead of just buy and hold SPY with leverage? You would significantly avoid transaction cost and taxes which probably eat up all your alpha if there was any
Because my portfolio has a long term return of 30% a year with 15% drawdown. Leveraged SPY (2x spy etf) would get me maybe 20% returns but also a non-zero chance of blowing up if spy drops more than 50%. Or if I used leverage to buy SPY then I would have to pay borrow fees. Leveraged ETFs also have a decay that can make drawdowns even worse.
Why would you deploy that strategy when the beta it’s probably 1 or just slightly higher instead of just buy and hold SPY with leverage? You would significantly avoid transaction cost and taxes which probably eat up all your alpha if there was any
Which strategy are you referring to? I’m not sure I showed a specific strategy in this post.
I was referring to your portfolio vs benchmark
Because my portfolio has a long term return of 30% a year with 15% drawdown. Leveraged SPY (2x spy etf) would get me maybe 20% returns but also a non-zero chance of blowing up if spy drops more than 50%. Or if I used leverage to buy SPY then I would have to pay borrow fees. Leveraged ETFs also have a decay that can make drawdowns even worse.
Sharing ones trading performance is akin to letting someone look into your soul. Thank you for the content.
Thank you I will continue these performance checks every so often