The HFEA strategy continued improving significantly in July. I continued accumulating SPXL at lows and eliminated TMF. Now my strategy will be to accumulate SPXL when the fund drops 25% below my cost basis and trim the gains when it goes 25% above my cost basis. I will save the proceeds for the declines and purchases.
Initially, I dedicated $15,000 to this strategy. That represented approx. 15% of our portfolio. If the strategy underperforms and is below this amount, I will add cash to it. If it outperforms and ends above this threshold, I will trim the position and save the cash aside.
The HFEA strategy is about investing in leveraged ETF but adding protection to the downside since the leverage works both ways. I like the idea because drawdowns can be significant. However, with my adjustment, this is no longer an HFEA strategy. But for continuation, I will keep calling it in my reports.
| MONTH | NET-LIQ | PROFIT/ LOSS |
PROFIT/ LOSS %% |
| November 2021 | $13,441.91 | $0.00 | 0.00% |
| December 2021 | $14,773.72 | $1,331.81 | 9.91% |
| January 2022 | $12,597.96 | -$2,175.76 | -14.73% |
| February 2022 | $11,665.69 | -$932.27 | -7.40% |
| March 2022 | $12,483.01 | $817.32 | 7.01% |
| April 2022 | $8,694.65 | -$3,788.36 | -30.35% |
| May 2022 | $6,923.49 | -$1,771.16 | -20.37% |
| June 2022 | $12,199.81 | $5,276.32 | 76.21% |
| July 2022 | $15,551.55 | $3,351.74 | 27.47% |
Our HFEA strategy recovered all losses by July 2022 and is now up 15.69% while the entire market lost -9.14%.
HFEA charts
Strategy Net liquidation value
Strategy vs SPY Net liquidation value
Strategy performance vs. SPY
June 2022 was a good month for this strategy as the SPXL helped boost the account while we trimmed the TMF fund. I will slowly re-allocate TMF and new cash into SPXL in preparation for the next market rally. When it comes, I expect this strategy to outperform the market significantly.
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