Switch Method Adopted
Combining Mostly USA & Worldwide Systems Creates
Low Risk, Higher Returns Than Trading Either Alone
7.9 years June 28, 2002--May 7, 2010
Mostly USA ETFs & Worldwide ETFs Portfolios
Hypothetical--Weekly
Statistical Footnote below
ADOPTION & RULES
The 'Switch' Method is officially adopted as of the market close Friday, May 14, 2010, price 1030.57. Real-time returns will be reported from that date and price forward.
TABLE OF HISTORICAL SWITCH TRADES
Mostly USA & Worldwide ETFs Portfolios
Hypothetical
Eight Years 2002-2010
Statistics & Notes below
|
switch |
|
% |
|
|
wks |
|
Date |
to |
price |
profit |
%P |
%L |
held |
|
6/28/2002 |
WW |
100 |
16.1 |
16.1 |
|
5 |
|
8/2/2002 |
USA |
116 |
5.6 |
5.6 |
|
3 |
|
8/23/2002 |
WW |
123 |
13.5 |
13.5 |
|
6 |
|
10/4/2002 |
USA |
139 |
10.1 |
10.1 |
|
8 |
|
11/29/2002 |
WW |
153 |
-6.2 |
|
-6.2 |
3 |
|
12/20/2002 |
USA |
144 |
11.5 |
11.5 |
|
2 |
|
1/3/2003 |
WW |
160 |
3.8 |
3.8 |
|
8 |
|
2/28/2003 |
USA |
167 |
82.5 |
82.5 |
|
52 |
|
2/27/2004 |
WW |
304 |
-6.9 |
|
-6.9 |
3 |
|
3/19/2004 |
USA |
283 |
3.5 |
3.5 |
|
3 |
|
4/8/2004 |
WW |
293 |
-8.0 |
|
-8.0 |
5 |
|
5/14/2004 |
USA |
270 |
11.5 |
11.5 |
|
5 |
|
6/18/2004 |
WW |
301 |
1.3 |
1.3 |
|
8 |
|
8/13/2004 |
USA |
305 |
15.9 |
15.9 |
|
7 |
|
10/1/2004 |
WW |
353 |
-1.9 |
|
-1.9 |
2 |
|
10/15/2004 |
USA |
346 |
-5.0 |
|
-5.0 |
11 |
|
12/31/2004 |
WW |
329 |
-2.8 |
|
-2.8 |
2 |
|
1/14/2005 |
USA |
320 |
5.2 |
5.2 |
|
7 |
|
3/4/2005 |
WW |
337 |
-6.0 |
|
-6.0 |
8 |
|
4/29/2005 |
USA |
316 |
17.3 |
17.3 |
|
14 |
|
8/5/2005 |
WW |
371 |
1.3 |
1.3 |
|
3 |
|
8/26/2005 |
USA |
376 |
3.0 |
3.0 |
|
3 |
|
9/16/2005 |
WW |
387 |
0.6 |
0.6 |
|
5 |
|
10/21/2005 |
USA |
390 |
19.7 |
19.7 |
|
15 |
|
2/3/2006 |
WW |
466 |
-3.2 |
|
-3.2 |
1 |
|
2/10/2006 |
USA |
451 |
7.3 |
7.3 |
|
14 |
|
5/19/2006 |
WW |
484 |
-0.5 |
|
-0.5 |
11 |
|
8/4/2006 |
USA |
482 |
1.4 |
1.4 |
|
31 |
|
3/9/2007 |
WW |
488 |
0.0 |
|
0.0 |
4 |
|
4/6/2007 |
USA |
488 |
7.6 |
7.6 |
|
16 |
|
7/27/2007 |
WW |
525 |
7.2 |
7.2 |
|
8 |
|
9/21/2007 |
USA |
563 |
-0.1 |
|
-0.1 |
6 |
|
11/2/2007 |
WW |
563 |
11.6 |
11.6 |
|
24 |
|
4/18/2008 |
USA |
628 |
0.6 |
0.6 |
|
7 |
|
6/6/2008 |
WW |
632 |
1.7 |
1.7 |
|
10 |
|
8/15/2008 |
USA |
642 |
1.3 |
1.3 |
|
3 |
|
9/5/2008 |
WW |
651 |
27.7 |
27.7 |
|
17 |
|
1/2/2009 |
USA |
831 |
6.8 |
6.8 |
|
2 |
|
1/16/2009 |
WW |
887 |
0.7 |
0.7 |
|
11 |
|
4/3/2009 |
USA |
894 |
7.7 |
7.7 |
|
42 |
|
1/22/2010 |
WW |
963 |
-4.6 |
|
-4.6 |
4 |
|
2/19/2010 |
USA |
919 |
12.2 |
12.2 |
|
11 |
|
5/7/2010 |
USA |
1031 |
open |
|
|
|
|
|
|
|
|
|
|
|
|
|
sum |
316.4 |
-45.1 |
409 |
|
|
|
avg |
10.5 |
-3.8 |
10 |
Statistical Footnote
Compound average return 34.6% per year
Position still open as of 5/14/2010
Average holding period 10 weeks
Average profit per trade 10.5%
Average loss per trade -3.8%
Win/Lose $$ ratio 7 to 1
Profit factor 7.0
Biggest win 82.5%
Largest loss -8.0%
Worst drawdown -20%*
Average 5 switches per year
Longest single switch 52 weeks
(2/28/2003, Mostly USA)
*Outcomes are impervious to drawdowns,
but are included here for those who would like
to see how much they would have been worried
had they been on board.
Note the behavior profiles during the two bear-market periods, the first during late 2002-early 2003, the second marked by the magenta bars at the bottom and top of the chart. While the market tanked in each instance,
-56% in the recent crash, the switch-system results curve not only did not drop, it rose strongly and exploded upward in 2008.
If you choose to hold cash during bear markets, your equity-curve profile would look something like the chart here.
PROJECTED WEALTH COMPARISON
Switch System vs
SP500 & Treasury Bills
-- Dollars --
Hypothetical
|
Years |
Tbills |
SP500 |
Switch |
|
start |
10,000 |
10,000 |
10,000 |
|
5 |
11,124 |
11,877 |
44,121 |
|
10 |
12,374 |
14,106 |
194,666 |
|
15 |
13,765 |
16,754 |
858,885 |
|
20 |
15,312 |
19,898 |
3,789,481 |
|
25 |
17,033 |
23,633 |
16,719,552 |
|
30 |
18,948 |
28,069 |
73,768,264 |
Comment. The first two rows in the table are creditable, believably possible. With the rows below, belief wears thin and thinner until it perhaps disappears. A recent survey of subscibers showed that half believed the table is possible, half did not.
I can prove to you that it is not only possible. It has already happened. But that is matter for another day.
The annual rates of return are 2.2, 3.5, and 34.6% for Treasury Bills, the S&P 500, and the Switch system respectively. The multiple-year rows are the results of compounding. Switch doubles money every 2.3 years on average. Its exploding numbers over the advancing years seem amazing, but I think no more so than much of what else goes on in the Universe.
Posted
5/16/2010 10:25 p.m. EDT
Amended
6/4/2010 12:37 p.m. EDT
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