One caveat to my post: if you're saying you made 25-30% with a 4% MDD in a single year, I believe that's possible. I did it myself one year. Occasionally all the stars line up and you have the perfect system for the current market. But if you believe you can do this year after year, that's not realistic at all.
So because high networth individuals would kill for it, it couldn't possibly exist? Not sure I follow the logic there. From experience, 7+ sharpe is eminently doable if you trade with a high enough frequency (1000+ trades per day) with a decent edge. Such systems tend to be quite limited in capacity, and therefore not investable. It is like a small business, you can't just add a billion dollars into it and expect a return - you're limited by your number of customers and not available capital.
It's not clear how much capital you can invest or how scalable this is. If you can take $250K and make 30% for 10 straight years (no new investments or additions), you'll have a cool $3.5 billion in a decade. Congratulations, you made the Forbes 400! However, I suspect no system makes such returns ad infinitum (or even 10 years) that doesn't either take on huge risks or simply stop working much earlier.
I see your points; most likely he meant anything is possible. BUT doing it many years may not be probable @ all. Some one called Dave Ramsey+ said why do you claim 12 %@ over long time on your mutual funds,; GS does not even average 12% ??.LOL I see that GS logic;but its wrong, Great performing fund in MODERN TRADER mag, back in the day when they printed it; they named one of the top funds[under $10 million AUM, i think] ''60% Maximum DrawDown '' Looked for them again ,years later never found them, could be my fault LOL
I never understood why Ramsey throws around that 12% figure either. It's more like 9% long-term if you reinvest dividends but don't adjust for inflation. I think Ramsey wants people to avoid what he considers risky investments (flipping houses, trading options or cyptos, etc.) so he overstates his case.
%% Well some have done much better than 12%; very long term. A lot depends on start date. QQQ has long term average 18%, depending.................................................Thanks
Right, but he's not a believer in timing or picking special funds or anything. He just wants you to invest in plain vanilla diversified mutual funds. And those haven't made a 12% CAGR over any long (20-year+) period.
%% TRUE; but can find plenty that do+ do better than 12%. And its a long term proven path to everyday millionaires . He said he though S&P 500[SPY is a good benchmark ] would do about brake even about the time it was down about [-20%] I thought to my self; no way in late 2019. Then he later said it would be down more. LOL..QQQ as one of many examples has done 18% depending; can go up or down 80%...........................................
Run QQQ through https://www.portfoliovisualizer.com/backtest-portfolio and you get 4% and change. Granted it has an unfavorable start date (2000), but no reasonable backtest of techs can ignore the Dot-Com crash. I've done a lot of long-term timing studies, and haven't seen any with 12%/year+ over an investor's lifetime (~50 years) without using leverage or dubious (curve-fit) backtests... You can do about as well as buy-and-hold with less risk with some broad, robust timing and seasonality, but only get high returns with the curve-fit junk.
%% Thanks for your comment; filled with errors. And also proves my point,MKT, depending on start; QQQ started in 1999 + ran up from $55 to$ 120 area. I have so many charts on that one-no sir= you may get 4% . But You're right on buy + hold, on a top trender.,