How to beat the market with this easy seasonal strategy

Seasonal Edge | Dec. 15, 2017 at 12:47 AM

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We all know the most common and simple seasonal system in the stock market “Sell in May and go away“.  It simply means to buy SPY in November and cash out on May.

 

Further examination of SPYs monthly seasonal tendencies yields more precise holding pattern of SPY.

Simply holding SPY through its most favorable months (Merch, April, July, October, November, and  December) will improve our result dramatically.

Now we are left with the question: With the current system, our money stands still 50% of the time, can we do something about that?

 

Sure we can, Let throw some long-term treasury bonds into the mix and see if we can enhance our system. We will buy and hold TLT in the following Months: January, May, August, September to fill in the gaps as best as we can.

Again our outcome is improved:

And now let’s take the same strategy basics and put it on steroids, replace our securities with leveraged ETFs. Instead the SPY we will Use SPXL – SPY X3 And instead of the TLT we will use TMF – TLT X3, changing the Holding periods a bit to fit the ETF’s Tendencies and Bob’s your uncle.

What we have is a simple monthly rotation strategy with 17000% gain over 9 years.

You can follow the performance of this strategy on the following strategy page