Strategy: 3x leveraged Universal Investment Strategy

Home Forums Logical Invest Forum Strategy: 3x leveraged Universal Investment Strategy

This topic contains 58 replies, has 25 voices, and was last updated by  Alexander Horn 1 year, 3 months ago.

Viewing 15 posts - 16 through 30 (of 59 total)
  • Author
    Posts
  • #27987

    Deshan Woods
    Participant

    I’m using TQQQ in place of SPXL…I just like the Q’s better.

    #28316

    Raymond Capozzi
    Participant

    I too wonder why SPXL over UPRO. The volume on UPRO is way better than SPXL. That should reduce spread. But what about cost? I don’t know.

    I prefer the UPRO index over TQQQ as SP500 is more diversify. I hate to risk capital on so few companies that occupy QQQ. QQQ is 70% made from AMZN, GOOG, APPL, and Facebook (is that really a company) since it is market cap weighted index. I really like the idea of QQQE. I do not know of a 3X version of that index. But I like the idea of back testing even more. LogicInvest does those things. And they do it very well.

    #31539

    Nikesh Simha
    Participant

    Will using a MA crossover as a cash filter help this strategy? Is there any reason not to do this? Will Using a filter for going to cash diminish the returns significantly? I would imagine it would certainly decrease drawdowns. Your thoughts are greatly appreciated.
    Thanks You.
    -Nikesh

    #31540

    Vangelis
    Keymaster

    Historically, it has been better not to use a MA filter since Treasuries worked better than go-to-cash. In other words, from a backtesting point of view, it has been best to be always invested. The BUG does use the mechanism you mentioned and the leverage version is currently all in cash, because of that.
    Keep in mind that UIS 3x is not the best choice for very volatile markets since both 3x components suffer losses. There are other more conservative choices. If you must trade the 3x, it is better to short the reverse 3x’s, or if you cannot, go with the straight UIS.

    #31917

    yura socolov
    Participant

    I was wondering, since essentially we are doing buy and hold on these securities, albeit with rebalancing, would adding short term covered call writing improve the results and soften the risk a little? Is there a reason not to do it?

    #31956

    Patrick
    Participant

    Hi,

    It is a good strategy to apply the same ratio as the maximum yield strategy for the 3x leveraged Universal Investment strategy (ex: 40% SPXL and 60% TMF if maximum yield strategy is 40% ZIV and 60% TMF), such as for the beginning of the month and for the middle of the month.

    Thanks

    Patrick

    #31970

    Frank Grossmann
    Participant

    The 3x leveraged SP500 ETF is moving very similar to ZIV, so many times also the ratios are the same. If however the VIX Futures go again in steep contango so that ZIV will gain again from rolling the Futures, then the ratio can be quite different.

    #33570

    Greg Gaines
    Participant

    I am a bit confused by the posted 2009 Annual Performance Vs Spy return of 174%. When I examine the monthly returns for 2009 as given in the section below the Annual returns. I calculate a 2009 return just barely over 20%. Can you clarify please?

    Thanks,
    Greg

    #33572

    Vangelis
    Keymaster

    Hello Greg,
    The small yearly bar chart was pulling the wrong data. It should show the correct values now.

    #34743

    Deshan Woods
    Participant

    Just wanted everyone to know that the 3x leveraged version strategy page hasn’t been loading over past week.

    #34745

    Vangelis
    Keymaster

    Thank you for the feedback. It should be loading proprerly now.

    #34938

    Johan Holmgren
    Participant

    Hi what is the difference in return since inception (around 7000%) and max return on the chart (around 5000%)?

    Thanks,
    Johan

    #34996

    reuptake
    Participant

    I have a question that maybe bit stupid, but I have to ask: what is the point of using non-leveraged UI strategy, when one can use leveraged with 1/3 of funds?

    #34999

    Vangelis
    Keymaster

    Depending on volatility, 3x Etfs experience decay and in the long run will not provide 3x the returns of the simple ETFs. UIS with 300K allocated will, most of the time, perform a bit better than 3xUIS with $100K due to 3x ETF decay. There is a lot of literature on 3x ETF decay available on the internet.

    #37505

    Supal Patel
    Participant

    In the monthly strategy email it says universal investment strategy can be used with different scenarios like “There are many kinds of option trades possible. Most of them will be selling ATM or OTM SPY and TLT strangles.”

    My questions:

    1) Can we combine Logical Investment strategies with some option premium selling strategies? Have you performed any back test to see what kind of option selling strategies can be applied?

    2) Do you suggest selling covered calls or selling ATM put options for NASDAQ100 or gold currency or UIS?

    Appreciate some guidance on this.

Viewing 15 posts - 16 through 30 (of 59 total)

You must be logged in to reply to this topic.