The SWAN Team's Track Record: Protecting the Portfolio
Performance is always an investors primary objective. But what happens if there is another downturn?
Contrary to what most investors expect, most of Wall Street's offerings have it written in stone that they cannot and will not ever do much to protect your money in periods of market turmoil. All index funds, all ETFs, and nearly all mutual funds have language in their prospectuses that requires them to stay almost fully invested no matter what happens.
In selecting the SWAN team, we wanted analysts who in addition to good performance have a long-term track record of actively protecting their portfolio at the right times by moving to cash, changing sector allocations, and using inverse ETFs.
One of the ways to measure a team's track record at protecting a portfolio is to ask how big of a loss would an investor have to endure if he happened to buy on one of the peaks?
The table to the right provides the answer. A hypothetical investor who started with $25,000 on 5/9/03 would have seen the account peak at $51,000 on 4/8/04 before suffering the first significant drawdown of 15% ending on 8/12/04.
From that point, the SWAN team gained 32% until hitting the next peak on 3/9/05, then lost 10% over the next 6 weeks ending 4/15/05. From there, the SWAN team gained 31% over the next 6 months hitting the next peak on 10/3/05, and so on.
Here are some conclusions we draw from this analysis.
1) Even the very best analysts have periods where they lose money.
2) If we can give this team the latitude to lose 20%, there would have been only 1 time in the past 6 years when that would have been triggered (last year). Even in this case though, the SWAN team fell less from peak to trough than the S&P 500, and they recovered faster.
3) The SWAN Team has delivered good returns, but investors need to be able to give them the latitude to choose when to be in the market and when to protect the portfolio.
Model Portfolio Performance Information
The performance information presented and discussed on this page pertains to Marketocracy.com model funds.
For all model performance results, there are inherent limitations which investors should understand. Unlike an actual performance record, model results do not represent actual investment performance or trading. Since the trades have not actually been executed, the results may under- or over-compensate for the impact, if any, of certain market factors, such as the effect of limited trading liquidity.
No representation is being made that any investor will or is likely to achieve results similar to those shown. The results presented reflect past performance and should not and cannot be viewed as an indicator of future performance.
The results shown are not an indicator of the returns a client would have realized or will realize in relying on any model mentioned.
The analysts who manage the model funds are not employees of Marketocracy or any of its affiliates, but are independent investment researchers acting solely as independent contractors.
The performance information presented and discussed on this page pertains to Marketocracy.com model funds.
For all model performance results, there are inherent limitations which investors should understand. Unlike an actual performance record, model results do not represent actual investment performance or trading. Since the trades have not actually been executed, the results may under- or over-compensate for the impact, if any, of certain market factors, such as the effect of limited trading liquidity.
No representation is being made that any investor will or is likely to achieve results similar to those shown. The results presented reflect past performance and should not and cannot be viewed as an indicator of future performance.
The results shown are not an indicator of the returns a client would have realized or will realize in relying on any model mentioned.
The analysts who manage the model funds are not employees of Marketocracy or any of its affiliates, but are independent investment researchers acting solely as independent contractors.