Approx 19% per year with simple buy and hold portfolio

Fred Piard at seekingalpha has written about his thoughts on having a buy-and-hold part of his portfolio even though he considers himself a dynamic investor.

Now for his ALFA-FXG-FXH-PJP part I have created a backtest from 31, May, 2012 using quantopian with yearly rebalancing.

Benchmark (SPY) gives total 69.19% return while the above gives 119.6% return which is approximately 19% per year. Not bad but then again this is in the bullmarket.

Biotech and healthcare have given excellent returns in the last few years and probably will outperform SPY in the future.

This is an easy way to beat SPY with no doing on your part.

Please note that currently as of today the co-direction values of ALFA-FXH, ALFA-PJP are 0.69 and 0.67 respectively meaning we are roughly investing in the same moves up and down. This could however change if the holdings of the ETFs change.

Personally I try to minimize the co-direction values in order to diversify my portfolio.


2 thoughts on “Approx 19% per year with simple buy and hold portfolio

  1. Christoffer Post author

    Without ALFA but just FXG-FXH-PJP from 5, May, 2007 and to today, then we get approx. 16% per year with a drawdown of 35%, SPY having a drawdown of 50% then this small strategy is better.

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