August was a muted month for our leveraged strategy. However, despite a significant decline in the markets and our overall account, HFEA held well. We only lost -$158 (-1.05%) compared to the SPX market which lost 1.25%.
Initially, I dedicated $15,000 to this strategy. That represented approx. 15% of our portfolio. When the SPXL underperforms the market and my position goes down and is below my cost basis (my position is in red), I add new shares to my portfolio. I deposit cash and buy shares. Once this bear market ends, and trust me, it will, as no bear market lasts forever, I will stop buying new shares but trim the position and save cash from selling for the next bear market. This is a standard balancing approach. Keep my position at about 15% of my main portfolio. When it moves to 20% (or more), I sell enough to bring the position back down to 15%. If it moves down to 10%, I will buy enough to bring it back to 15%, and so on.
| MONTH | NET-LIQ | PROFIT/ LOSS |
PROFIT/ LOSS %% |
| June 2022 | $12,199.81 | $5,276.32 | 76.21% |
| July 2022 | $15,551.55 | $3,351.74 | 27.47% |
| August 2022 | $13,414.80 | -$2,136.75 | -13.74% |
| September 2022 | $10,454.70 | -$2,960.10 | -22.07% |
| October 2022 | $16,809.60 | $6,354.90 | 60.79% |
| November 2022 | $18,659.90 | $1,850.30 | 11.01% |
| December 2022 | $16,562.20 | -$2,097.70 | -11.24% |
| January 2023 | $15,010.60 | -$1,551.60 | -9.37% |
| February 2023 | $13,990.20 | -$1,020.40 | -6.80% |
| March 2023 | $13,132.00 | -$858.20 | -6.13% |
| April 2023 | $15,222.60 | $2,090.60 | 15.92% |
| May 2023 | $13,808.00 | -$1,414.60 | -9.29% |
| June 2023 | $14,273.50 | $465.50 | 3.37% |
| July 2023 | $14,981.00 | $707.50 | 4.96% |
| August 2023 | $14,823.00 | -$158.00 | -1.05% |
Our HFEA strategy decreased value in August 2023 by -1.05% while the entire market decreased by -1.25% in the same period. Overall, the HFEA portfolio is up 10.27%. I think that is still a good result considering that I started this account in the worst time at the end of 2021 and rode it through the entire bear market in 2022.
HFEA charts
Strategy Net liquidation value
The chart above illustrates how volatile the account can be during volatile markets. The best approach to this strategy is to buy and forget. Watching the position too often can bring you diarrhea.
Strategy vs SPY Net liquidation value
Strategy performance vs. SPY
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