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Hi, folks. I am a new member and this is my first post. I am enjoying the site very much, especially tinkering with the Custom Portfolio Builder. I just have a question related to the Bond Rotation Strategy, particularly to CWB.
When I compare CWB to SPY over the last several years, it appears to me as though CWB is about as volatile as SPY, but long term, CWB underperforms SPY. For example, back in the summer of 2011, when SPY dipped by about 20%, CWB did also. Then, by February of 2012, SPY had recovered to even, but CWB was still underwater by about 6%. My question is, why do so many of the strategies seem to stay in CWB so much of the time? Wouldn’t it be better to simply use SPY when it is trending upward? Or, if the desire is to have a lower volatility position than SPY, why not use something like SPLV?
Thanks in advance for any clarification, and keep up the good work with the site.
