" Ultra QQQ " exchange traded fund ** ( symbol QLD). That is, during the "blue" signals, we apply a 33% portfolio allocation into the QLD instead of the QQQQ. Comparing part 1 to part 2, returns are increased and risk ( through the use of leverage ) is increased, yet to the extent that the leverage is applied to ONLY 1 of the 4 components that make up the model.
Also, since QLD has only "actively" been in existence since the beginning of 2007, we have to "simulate" leveraged returns on the signals in question prior to the 3/12/07 signal by applying a leverage calculation to the indices themselves. We additionally took into consideration the aspect of performance "slippage" that is reflected in the mechanics of leveraged ETFs
( certain structural pricing fluctuations in the internal portfolio composition through the use of futures contracts and option contracts that cause them to "overperform" or "underperform" the "stated" 200% returns ). With this in mind, we used a more conservative leverage factor of 150%. As an example of this discrepancy, the recent signal of 3/16/09 had achieved a 112% return using the QLD vs. a 49% return achieved by the QQQQ ( as shown in the 4th panel in pt.1 ); a MORE than 200% performance comparatively.
Another point of note is the addition of the data column on the left containing " % of portfolio invested " and the " average % portfolio invested " at the bottom of the 4th pane. As one can see, the model achieves a notable return while being 100% invested in just 8 out of 40 years and having an average of only 44% of portfolio capital put to work over 40 years .
** QLD "seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of the NASDAQ 100 Index".
View model's signals below :
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