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Back tested results of $1,000 invested in the FWB strategy versus S&P 500 buy and hold since 1928:

FWB Basic Table 6-15-24

The FWB basic strategy would have been less risky in 9 out of 10 decades and would have grown at a faster rate in 6 out of 10 decades with much higher returns overall (almost 10x).

Now let's zoom in and see how the FWB basic strategy would have performed in comparison with a $10,000 one time investment at a bad time to invest... at the peak right before a large market drop.

FWB Basic since 2000 6-15-24

$10,000 Investment at March 2000 Peak

Before the .com Bubble

S&P 500 Buy and Hold Strategy:

  • 7.3% Annual Return

  • Maximum Drop = 55%

 

FWB Basic Strategy:

  • 10.5% Annual Return

  • Maximum Drop = 33%

  • Only 53 trades in 23 years

$10,000 Investment at October 2007 Peak

Before the Great Financial Crisis

S&P 500 Buy and Hold Strategy:

  • 9.8% Annual Return

  • Maximum Drop = 55%


FWB Basic Strategy:

  • 11.3% Annual Return

  • Maximum Drop = 32%

  • Only 34 trades in 15 years

FWB Basic since 2007 6-15-24
FWB Basic since 2020 6-15-24

$10,000 Investment at February 2020 Peak

Before Covid

S&P 500 Buy and Hold Strategy:

  • 13.2% Annual Return

  • Maximum Drop = 32%


FWB Basic Strategy:

  • 17.1% Annual Return

  • Maximum Drop = 17%

  • Only 14 trades in 3 years

  • Flat lines happen when we sell and sit in cash until the next buy signal. 

Worst time for FWB strategy?

Does the FWB strategy always beat the S&P 500? Absolutely not. No strategy is always a winner.

 

This chart shows the worst period where the FWB mechanical strategy underperformed S&P 500 buy and hold between 1984 and 1999.  

This was an incredible bull market where the FWB strategy went to cash several different times and the market kept going up to more extreme valuations. However, the FWB strategy made up the difference and started outperforming the S&P 500 by May 2002.

Worst Period of Underperformance versus S&P 500

Further details on the assumptions used for our hypothetical backtesting

and the main risks as we see them are on these linked pages.

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