Beginning in 1994, you either owned SPY or your owned GLD and you followed the DGR Strategy signals. When leveraged ETFs were added, you switched to the appropriate one. The following shows the record since 1994:
You owned for these dates with this return
SPY 1/1/94-8/16/01 187.79%
IAU 8/16/01-12/31/04 58.60%
GLD 12/31/04 – 12/31/11 246.77%
UGLD 1/1/2012-01/23/13 10.14%
UPRO 01/23/13 – 04/24/17 290.62%
If you compound these five numbers you get: 6,709%
$10,000 invested initially becomes $680,957
I must pause now and let those numbers sink in, not just for you but for me also.
Holy crap!
That works out to an average annual return of 19.83% per year over 23 1/3 years. While 20% per year is a fantastic return, it is a lot more believable than a 6700% return even though they are the same thing over our time period.
What you may also be surprised at is we really did only three trades meaning we (1) went into stocks, (2) switched to gold and then (3) switched back to stocks.
Compounding at almost 20% per year is pretty life changing. Using a simple return calculator, $12,000 per year for 15 years at 19.83% nets you over $1 million.
During out test here, the DGR Strategy was up 6700%, SPY was up 677% and IAU was up 212%. So DGR was up ten times SPY and 30 times IAU. Switching using the DGR along with leveraged ETFs seems to be a pretty good strategy.
One last item here is the recent increase in the average annual return on trailing 5-year performance.
Beginning in 2012 we went to 3 times ETFs and performance jumped above 30% per year. It didn’t’ hurt we doubled the account value in calendar year 2013 over the two positions. As time goes on, I expect to see that out performance continues at higher rates than when we used 1 times ETFs.