Performance

The performances of our dynamic asset allocation Soaring Eagle and Guiding Star systems are shown in the tables that follow. The performance of passively buying and holding the SPY exchange traded fund tracking the S&P 500 US stock index is also listed for comparison. The returns are listed as cumulative returns over a five year period from 2006 through 2010 in Table 1. In Tables 2-4  the annualized returns for each year along with those of the entire five year period are listed. The MaxDD% is the, peak to valley, maximum draw down on the portfolio calculated in percentage terms during the period described.  All numbers are rounded off to complete decimals. An ideal investment system will have large values of annualized returns and a low or zero value of the MaxDD%. By this metric our strategies show extraordinary performance compared to the traditional buy and hold approach as the tables display clearly. We are focused on keeping MaxDD% to a minimum while maintaining high returns.

Table 1:  Cumulative Returns: The first column lists the strategy used from which returns are tabulated for the cumulative five year period starting 1^st January 2006 through 31^st December 2010. The second column lists the cumulative profit in percentage of all our strategies. The third column gives the MaxDD%. The last row gives data for the buy and hold strategy for the SPY ETF.

Cumulative 5 year (2006-2010) Performance For All 3 Strategies and SPY
Strategy	Five Year Percentage Return	MaxDD%
Soaring Eagle	182%	10%
Guiding Star Portfolio A	77%	9%
Guiding Star Portfolio B	73%	6%
SPY Buy & Hold	12%	51%

 

Table 2:  Soaring Eagle Strategy: The first column lists the year from which returns are tabulated for the entire year starting 1^st January through 31^st December. The second column lists the annualized returns of our Soaring Eagle strategy. The third column gives the same for the buy and hold strategy for the SPY ETF. The fourth column gives the MaxDD% for our Soaring Eagle strategy. The fifth column gives the MaxDD% for the buy and hold strategy for the SPY ETF. The last row lists the annualized performance and the MaxDD% over the entire five year period from 1^st January 2006 through 31^st December 2010. This portfolio trades once a month only. 

Year	Annualized Returns		MaxDD%
	Soaring Eagle	SPY	Soaring Eagle	SPY
2006	20%	16%	4%	3%
2007	19%	5%	4%	5%
2008	24%	-37%	9%	37%
2009	34%	26%	5%	18%
2010	19%	15%	5%	13%
5 years (2006-2010)	23%	2%	9%	51%

 

Fig. 1: 2006-2010 equity curve for the Soaring Eagle strategy in green and the SPY Buy and Hold in blue.

Table 3:  Guiding Star Strategy Portfolio A: The first column lists the year from which returns are tabulated for the entire year starting 1^st January through 31^st December. The second column lists the annualized return of our Guiding Star Portfolio A strategy. The third column gives the same for the buy and hold strategy for the SPY ETF. The fourth column gives the MaxDD% for our Guiding Star Portfolio A strategy. The fifth column gives the MaxDD% for the buy and hold strategy for the SPY ETF. The last row lists the annualized performance and the MaxDD% over the entire five year period from 1^st January 2006 through 31^st December 2010. This portfolio trades once a month only.

Year	Annualized Returns		MaxDD%
	Guiding Star Portfolio A	SPY	Guiding Star Portfolio A	SPY
2006	14%	16%	4%	3%
2007	9%	5%	2%	5%
2008	3%	-37%	7%	37%
2009	29%	26%	6%	18%
2010	8%	15%	5%	13%
5 years (2006-2010)	12%	2%	9%	51%

 

Fig. 2: 2006-2010 equity curve for Guiding Star Portfolio A in green and the SPY Buy and Hold in blue.

Table 4:  Guiding Star Strategy Portfolio B: The first column lists the year from which returns are tabulated for the entire year starting 1^st January through 31^st December. The second column lists the annualized returns of our Guiding Star strategy. The third column gives the same for the buy and hold strategy for the SPY ETF. The fourth column gives the MaxDD% for our Guiding Star strategy. The fifth column gives the MaxDD% for the buy and hold strategy for the SPY ETF. The last row lists the annualized returns and MaxDD% over the entire five year period from 1^st January 2006 through 31^st December 2010. This portfolio trades once a quarter only. 

Year	Annualized Returns		MaxDD%
	Guiding Star Portfolio B	SPY	Guiding Star Portfolio B	SPY
2006	17%	16%	2%	2%
2007	6%	5%	0%	3%
2008	3%	-37%	1%	37%
2009	22%	26%	1%	11%
2010	11%	15%	6%	11%
5 years (2006-2010)	12%	2%	6%	51%

 

Fig. 3: 2006-2010 equity curve for Guiding Star Portfolio B in green and the SPY Buy and Hold in blue.

Meaning of annualized return data:

The annualized return for our Soaring Eagle strategy was 23% starting from 2006 over a period of 5 years. This means an amount of $100,000 invested in our Soaring Eagle system portfolio over these five years starting in the beginning of 2006 would grow to an amount of ($100,000)[(1.23)⁵] = $281,531 by the end of 2010. During the same period the annualized return for the SPY ETF was 2%. This means an amount of $100,000 invested in the SPY ETF over these five years starting in the beginning of 2006 would grow to an amount of ($100,000)[(1.02)⁵] = $110,408 by the end of 2010. The difference in amounts at the end of 2010 would have been $171,123.

Meaning of MaxDD% data:

For the last row, of the Guiding Star Portfolio A, we see a MaxDD% of 9%. This means at some point in the last five years our portfolio declined at worst by 9%. This means an amount of $100,000 would have temporarily declined to ($100,000)(1- 0.09) = $91,000. This would have been the worst % decline in the portfolio. On the other hand the SPY ETF gave a MaxDD% of 51% during the same period. This means an amount of $100,000 would have temporarily declined to ($100,000)(1- 0.51) = $49,000, if invested in the SPY ETF. Our system would thus have caused significantly less emotional stress to the investor, while giving superior returns, i.e. a high annualized return.