This journal is the 2007 sequel to my previous one, called Verisimilitude Fund. The rules and the original strategy can be read here: http://elitetrader.com/vb/showthread.php?s=&threadid=72826 In short I discovered a very simple way how to outperform the market without doing pretty much anything. If you are a fundmanager, that is no small feat. Again, it doesn't guarantee a huge return, all it provides that you will end up a few % higher than the market for that year, so you can have your bonuses. Well, in case the market has a extended selloff, I will try to stay out of it thus remain positive... Last year the S&P ended up unexpectedly 13.6% and although I am not an expert, but I would say very few funds actually beat it. The previous journal was started in July and I only managed it actively for 2 months, nevertheless it ended up with 7% in 6 months, which is exactly the half what the S&P did in the whole year. Had I got long from the start of the journal and just kept rolling over when the futures expired I would have had the same result (since when I started the market was at breakeven YTD) but in half of that time, thus outperforming the S&P by a factor of 2... Lesson learnt, if I want to mimic the index's movement, I have to be long most of the time, except times of obvious pullbacks... If you were too lazy to read the provided link, this is an imaginative fund, 16 ES contracts traded for every million AUM, also called unit. Maximum 2 units allowed to be traded, 80% of the money is in CDs giving a 4% safe return and edge over the market. Trades are posted in real time, positions can be held for weeks or just for hours.... The S&P closed 2006 at 1418.3 so 1% gain/loss will be 14.2 ES points. If you did the math, that is no leverage... Well, let's go, long 1 unit 1437... Godspeed....