Diversified Algo Portfolio Allocation vs SP500 Index

SimpleMeLike · Nov 2, 2022

MKTrader said:
The link is on my comment. See the highlighted part.
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Thank you buddy. You are awesome!

BAT31 · Jan 8, 2024

SimpleMeLike said:
Hello All,

I will get straight to the point.

Questions:
1. What is the purpose of a Diversified Algo Portfolio when I can just DCA SP 500 index the rest of my life for like $500 a month?

2. Is it possible the portfolio will return +50% every year the next 20 years?

3. Are Diversified Algo Portfolio for yearly income for traders?

In the automated trading systems teachings, books, and research document I read the holy grail is something similar to

Build a portfolio of robust, low correlated, diversified algos that are built from trading in both directions, long and short. Preferable the algos must have profit factor greater than 2. Back test these algos for +10 years of historical data.

For example, see below of an example of the so-called holy grail algo building.

Comments

1. I am not understanding the reason to perform all this work, energy, and effort, when I or someone can just simply dollar cost average the SP 500 index for the next 20 years, and will most likely beat the portfolio of diversified algos in the end. DCA in SP500 index seems less risk, less work, less effort, and the returns good enough.

2. The cost to build all these algos per market will cost about +$200,000 I believe. Seems just DCA that money in SP500 index an individual will perform better.

3. I believe that running 1 or 2 algo and scaling that 1-2 algos in contract size has more favorable returns and a better goal.

Maybe I am confused, just not sure I see the benefit of Diversified Algo Portfolio unless it is for yearly income reasons. For example, take the $200,000 and hope for 20% return a year and make $40,000 income per year. Now that sounds realistic.

Please share your input on why you have the Diversified Algo Portfolio or believe in it.

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A trader just won the Robbins Cup with such a strategy in the futures markets. He ran $241,000 to over $1M in 11 months.

https://na07.mypinpointe.com/d/Hkf8...ssTeG1LR5bGoLyTSm32M3UOiBhKmxYkbbmoVz7UcF_y3k

Therefore, I believe in a diversified algo portfolio.

SimpleMeLike · Jan 8, 2024

BAT31 said:
A trader just won the Robbins Cup with such a strategy in the futures markets. He ran $241,000 to over $1M in 11 months.

https://na07.mypinpointe.com/d/Hkf8...ssTeG1LR5bGoLyTSm32M3UOiBhKmxYkbbmoVz7UcF_y3k

Therefore, I believe in a diversified algo portfolio.
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Good Morning BAT31,

Thank you for sharing. I believe in diversified algo portfolio as well. I wish had enough capital to build one myself.

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Diversified Algo Portfolio Allocation vs SP500 Index

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BAT31

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