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Winners

2023 turned out to be a fantastic year for our investors. Here is a brief look at some of our strategies that performed well over the past year.

Top Performer

Our Crypto & Leveraged Top 2 Strategy was the top performer, achieving an incredible 86.3%. It ended the year holding SPXL and TMF instead of crypto. This strategy invests in top performers across a selection of crypto, equity, treasury, and precious metal assets with similar volatility characteristics. It is a highly aggressive strategy that rebalances twice a month and requires access to both Bitcoin and Ethereum, as well as leveraged ETFs.

Consistent Achievers

Our Maximum Yield Strategy (MYRS) and US Market Strategy 2x Leverage (2xUIS) posted returns of 43.8% and 31.8%, respectively. The MYRS, one of our oldest strategies, trades in one of the most profitable asset classes: Volatility. The 2xUIS is an intelligent, and leveraged version of the Equity/Bond portfolio that can shift from QQQ to SPY to SPLV (low volatility) according to current conditions.

Risk-Adjusted Performance

Our popular Nasdaq 100 Strategy, returned 29.5%, with a maximum drawdown of just 5%. This strategy is an effective way to capitalize on the extraordinary momentum of the Nasdaq 100 Index while offering some protection from market downturns. It is also an excellent alternative for stock-pickers seeking a rules-based stock selection strategy.

Favorite All-Around Diversified Strategy

Our Top 3 Strategies returned 14.9%, which may seem modest compared to SPY returns, but is more than sufficient for a conservative investor who considered staying in cash.

Average Performance

Across all strategies, the average year-to-date return was 16.9%.

Let’s not forget, 2023 began with very negative sentiment, as both equity and bond investors faced heavy losses. Yet, against that backdrop, we were positive and predicted a performance of at least 5% for 2023 in our January article.

What To Expect in 2024

The current sentiment regarding the Fed’s actions is that inflation will be contained without causing a recession, a scenario referred to as a ‘soft landing.’ This is optimistic, assuming inflation will be controlled without significant market correction – a rarity in the past.

According to Ben Bernanke, the Fed chair during the 2008 crisis, this is not our grandfather’s type of inflation, which was demand-driven, but is mainly caused by supply side restrictions and anomalies that can be easily reversed. The expectation for 2024 is for the Fed to lower interest rates three times, stimulating the markets and potentially causing prices to rise. This might already be factored into the powerful end-of-year S&P 500 performance.

Another perspective is through the Treasury yield curve. Historically, an inverted yield curve precedes a recession by six to 18 months. The inversion is caused by the Fed raising short-term rates more quickly than long-term rates to combat inflation. Thus, expecting a ‘soft landing’ implies that the current inverse yield curve will not precede a significant correction, or at least not a severe one.

We remain skeptical of these scenarios and advise investors to stay cautious. In the long-term (two to five years), we are optimistic about even higher equity prices, based on two factors:

1. Gains in productivity due to AI tech being widely utilized across all industries.
2. Inflation from increased money supply.

Finally, we wish you a happy new year filled with health, love, and happiness.

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