No. of Recommendations: 11
Based on your study, the only choice that beats B&H is GTT 43. It improved overall CAGR by 0.2%. Hardly worth the trouble IMO, if you can stand the higher volatility.
Correct.
But...
the purpose of timing is not to increase the CAGR -- although many people think (erroneously) that's the purpose. And then bail when it turns out to not improve returns.
No, the purpose of timing is to trim the drawdowns and reduce the volatility.
That GTT has better return than B&H is just a happy occurance.
Look at all those stardard deviations. B&H 15%, timing 12%.
And those Sortino Ratios. Which is a better metric than the popular Sharpe Ratio.
"The Sortino ratio measures an investment's return relative to its downside risk, offering a more precise risk-adjusted performance metric than the Sharpe ratio by only penalizing harmful volatility.
...
A higher ratio is better, with 1+ considered good and 2+ generally deemed excellent."
Actually, timing is not particularly beneficial in the accumulation years. The period when timing is mostly beneficial is in the retirement/withdrawal years. Because there is not enough time to recover from the loss periods.
