The secret sauce was first revealed back in July 2008 when I had about 50 readers (and had no idea how to make charts "pretty").
What is the secret sauce? An alternative to the "sell in May, go away"; sell the S&P 500 in May and then invest in the Long Government / Credit bond index (rather than sit in cash). The "strategy" (I wouldn't necessarily call it that) takes advantage of the following data (mining) that shows the Long G/C has outperformed the equity market for the May through October time frame over this 36 year period.
Average Returns by Month
The cumulative result (as of month-end August) since August 1974 (Long G/C data only goes back to 1974).
Update:
Reader Norman comments:
A useable presentation would be to divide the 'secret sauce' by the S&P 500. The way you have it now its impossible to see if the ss has been performing well, lately.Here you go...
And in log scale...
Source: Barclays Capital / S&P
There's nothing secret about this. Your strategy involves buying bonds that experienced a massive bull market during most of that period, and your strategy holds them for almost half of every year. Of course it will be superior to "going away," or 0%.
ReplyDeleteyou're just jealous you didn't data-mine it...
ReplyDeleteBottle that shayeet! Jealous much anon, I know I am!
ReplyDeleteJake, you have my email if you want to share any more tips........
A useable presentation would be to divide the 'secret sauce' by the S&P 500. The way you have it now its impossible to see if the ss has been performing well, lately.
ReplyDeletelog scale on cumulative result, please!
ReplyDeleteI think the labels on the log scale chart are wrong. It looks like SP500 performs better than secret sauce.
ReplyDeletefixed with slightly off colors...
ReplyDelete