Recipe for Better Sleep: Lower Volatility + Higher Returns
As you can see, there were periods of time where we both out- and under-performed relative to the S&P 500. But more importantly, our portfolio experienced dramatically lower volatility than your typical S&P 500 index investor. And by year-end, we closed with a 477 basis points outperformance.
It was a challenging year for many equities investors. Yet we enjoyed smoother returns and a better (and positive!) end result – what’s not to love about that?
If you like to nerd out on performance statistics, we’ve compiled this screen of portfolio analytics, courtesy of our friends at Fundseeder.com:
If our annualized return continues trending the way it has been, I expect our Sharpe Ratio (which compares the return of an investment against its drawdown risk) will increase to north of 1.0 in 2023, which is the sweet spot for Sharpe Ratio enthusiasts.
If this sounds like something you’d like to learn more about and/or that might benefit your trading, head here to learn more about Paid-to-Play.
Trade 'em Well,
Sean McLaughlin (@chicagosean)
Chief Options Strategist
All Star Charts, Technical Analysis Research