IMHO the highest probability of success for most investors is a buy and hold mix of index funds, assuming they can remain consistent. However, if people are willing to take on more risk and shoot for higher returns there may be strategies that make sense and can maybe yield a higher overall return – most likely with more volatility than the market.
I have been trading my own strategy for over 4.5 years and have had an annualized return of about 30%. I have had a drawdown of about 54% which isn’t easy to go through. Despite this I am very happy with my own strategy. I know there are others that will complain it is too risky or that it is broken or that it just got lucky. Of course, my analysis and research leads me to a very different conclusion.
I’m of the opinion that getting 30% annualized is pretty amazing especially since I have been able to do it tax free in a Roth IRA, no borrowed funds, limited risk trades, and survived the covid crash. I’m still investing in it instead of buy and hold index funds. A period like we have had with one of the worst bond markets since the 70s isn’t the norm and is very hard on my strategy. Despite this it is still kicking and I believe good times will come again. (I say this as though the strategy hasn’t made 30% YTD vs the S&P 500’s 10%).
I don’t know what your expectations are but anyone trying to tell you they can get 20% plus annualized with drawdowns of 20% or less is most likely wrong or the next best investor of all time. Good luck with wherever you go or what you decide to do. I have roughly $460,000 of my own money following the same algorithms that run my strategy Patience is a Virtue. The vast majority is inside Roth IRAs. So I think I have set myself up for success.
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