Half the pain of buy-and-hold, while parked cash earned close to 5%. As in 2020, the honest caveat: a fast recovery means the rule gives back part of the rebound.
When the market broke — and where the strategy stood
From the peak in January 2022 to the bottom, a plain buy-and-hold investor lost about 24% of their money. It then took until December 2023 — roughly 2 years — just to get back to even. Over that same stretch, the worst our strategy ever fell was about 12%. Roughly half of the pain, for a simple reason: the strategy steps out of the market when the trend turns down, and waits in safe Treasury bills until the trend turns back up.
One thing worth understanding when you look at the chart. Our strategy is really many small strategies, one for each slice of the market, and each one steps aside on its own. It walks to cash gradually and walks back in gradually. By 2022 and 2023, Treasury bills were paying close to 5% again, so even sitting in cash the strategy was earning a real return, and its line drifts upward.
Now the honest other side. This was a fast crash, down hard and back up almost as quickly. Our strategy cut the drawdown roughly in half, which is real protection, but a careful approach that waits for the trend to prove itself gives up much of a snap-back that sharp. Over this short window it ended a touch in the red even as the market recovered. In a fast V-shaped fall, the value is safety on the way down, not extra return.
