I hate to break it to you, sir, but I think your children’s perspective is probably more realistic. Build a diverse portfolio using a duration approach: 1- short term: outlook should be based upon what you think average rates, gdp growth, and policy will look like over the next year 2- mid term: outlook should be based upon what you think the average of rates, gdp growth, and policy will look like over the next 5 years 3- long term: outlook should be based upon what you think the average of rates, gdp growth, and policy will look like 10+ years out Your short duration portfolio should be used to fund cash (it’s that 4% sweep) and should sit in a portfolio of cash like assets that mature in 1 year or less. 2-4% of total portfolio. Your mid duration portfolio should be invested in investment grade, agency, and pass through bonds. This should be optimized to generate the cash that is paid out. About 50-60% of the portfolio. Your long duration portfolio should be invested in a mix of public and private equity investments. Try to 2x your money here every 10 years. This includes things like growth stocks (i would recommend indexing, so use spy or qqq). 30-40% if your total portfolio.
The problem is you are trying to reinvent the wheel. If you are going with a trend following system which should be simple enough to do, your time frame should be long term. The returns of 10% to 25% per year is reasonable and doable. Most of the best hedge fund managers can get 18%-28% per year. There will be years where you suffer a small loss. My advise, use the QQQ (long positions only) if price closes below the 50 SMA, go to cash. Re-enter when price closes above the QQQ. You should come out ahead, since, you are trading with the trend. Trade like a hedge fund and you will be better than 90% of aspring traders who listen to Reddit and other blogs for their trading decisions.
A part of my proposed strategy, rather than using the index itself would be to take advantage of the sector rotation within the SP100 as evidenced by the individual stock movement.
Yes, use the daily chart. Easy enough to manage and less stress. I am trend following my stock positions. Also, have my puts and calls which I sell to close out on options expiration. That gives me leverage and outsized returns for my calls and puts. Not for conservative investors or traders though.
The title said “for income” but you are thinking trend following which usually implies long term wealth. Why don’t you teach them to sell premium on the index if you want income?
If the kids don't want to trade for themselves, you could try something like https://investor.vanguard.com/advice/financial-advisor/ You won't get the 25% CAGR you want, but the money should last for them.
I did do a lot of selling Iron Condors on SPX in 2016 and 2017 and letting them expire with the Cash Settlement. I did it with every expiration entering the trade late in the day prior to expiration. I had good success but when volatility hit in 2018 it seemed like the Market Makers could not build enough premium into the options and I had too many max losses so I quit doing that. I never got back to that so I don't know how that strategy would be doing in today's kind of market.