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
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8 comments:
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%.
you're just jealous you didn't data-mine it...
Bottle that shayeet! Jealous much anon, I know I am!
Jake, 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.
log scale on cumulative result, please!
done
I think the labels on the log scale chart are wrong. It looks like SP500 performs better than secret sauce.
fixed with slightly off colors...
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