Verified profitable market timing for QQQQ, Rydex, mutual and index funds

The Rydex, the QQQQ long only, and the S&P 500 long only strategies are all IRA eligible.  Margin costs (for the QQQQ with margin strategy) were assumed to be 7% APR.  The S&P 500 returns can be accomplished by trading the SPY ETF or approximated by trading any S&P 500 index fund (e.g. Vanguard S&P 500 index). The best returns have been achieved via trading Rydex Velocity 100 and Venture 100 funds (note that the returns shown for Rydex are post-tax and taxes are assumed to be 33%). The Rydex fund strategy can be used for self-directed IRA accounts. The Rydex Venture 100 fund is a double beta inverse fund tracking the Nasdaq 100 (e.g. if the Nasdaq 100 goes down 1.2% then the Venture 100 fund goes up approximately 2.4%, if the Nasdaq 100 goes up 1.5% then the Venture 100 fund goes down approximately 3.0%). The ProFunds UltraOTC and UltraShort OTC funds can be used instead of the Rydex funds if desired. Note that the minimum starting Rydex account balance is $25,000 while the minimum starting ProFunds account balance is $15,000. For beginners or for more risk adverse traders we recommend opening an account with an online broker (e.g. Interactive Brokers) and trading the SPY ETF without using any margin. Another viable option is to open a Rydex (or ProFunds) account and place 50% of the account in a money market fund and trade the remainder using the Rydex (or ProFunds) double beta funds (e.g. Rydex Velocity 100 and Venture 100 or ProFunds UltraOTC and UltraShort OTC).

All returns except for the Rydex portfolio returns are calculated pre-tax and without dividends or reinvestments.  The tax rate for the Rydex account was assumed to be 33%.  Gross returns of the Rydex account were superior to returns from any other trading vehicle.

Rydex Dynamic OTC and Dynamic Inverse OTC funds (assumes 33% tax)
Year	Start	End	APR	Maximum Drawdown
2000	$100,000	$137,578	37.6%	39.1%
2001	$137,578	$1,215,898	783.8%	39.1%
2002	$1,215,898	$3,047,225	150.6%	23.6%
2003	$3,047,225	$5,124,274	68.2%	13.1%
2004	$5,124,274	$6,982,624	36.3%	20.4%
2005	$6,982,624	$8,568,513	22.7%	17.7%
QQQQ long and short no margin
Year	Start	End	APR	Maximum Drawdown
2000	$100,000	$148,211	48.2%	14.9%
2001	$148,211	$548,229	269.9%	14.7%
2002	$548,229	$1,283,664	134.1%	14.4%
2003	$1,283,664	$1,923,405	49.8%	8.0%
2004	$1,923,405	$2,628,406	36.7%	13.0%
2005	$2,628,406	$2,999,576	14.1%	12.4%
S&P 500 (Long and short, no margin)
Year	Start	End	APR	Maximum Drawdown
2000	$100,000	$122,056	22.1%	7.2%
2001	$122,056	$215,237	76.3%	7.1%
2002	$215,237	$416,357	93.4%	8.6%
2003	$416,357	$611,403	46.8%	5.5%
2004	$611,403	$791,153	29.4%	7.2%
2005	$791,153	$897,910	13.5%	9.4%
QQQQ (Long only, no margin)
Year	Start	End	APR	Maximum Drawdown
2000	$100,000	$100,775	0.8%	18.7%
2001	$100,775	$208,995	107.4%	21.7%
2002	$208,995	$274,054	31.1%	16.9%
2003	$274,054	$409,344	49.4%	8.1%
2004	$409,344	$514,708	25.7%	9.7%
2005	$514,708	$562,877	9.4%	8.5%
S&P 500 (Long only, no margin)
Year	Start	End	APR	Maximum Drawdown
2000	$100,000	$106,261	6.3%	6.7%
2001	$106,261	$141,126	32.8%	4.7%
2002	$141,126	$184,088	30.4%	8.5%
2003	$184,088	$255,156	38.6%	5.4%
2004	$255,156	$309,774	21.4%	5.4%
2005	$309,774	$340,806	10.0%	6.6%
QQQQ (Long and short, with 100% margin)
Year	Start	End	APR	Maximum Drawdown
2000	$100,000	$190,607	90.6%	28.6%
2001	$190,607	$2,045,290	973.0%	29.3%
2002	$2,045,290	$9,196,873	349.7%	27.7%
2003	$9,196,873	$18,144,553	97.3%	16.7%
2004	$18,144,553	$30,760,358	69.5%	27.0%
2005	$30,760,358	$36,735,946	19.4%	24.6%

 

Verified market timing for QQQQ, Rydex, mutual and index funds

 

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