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HFEA September 2022 strategy report

The stock market is tanking, which takes a toll on our strategy. We are down again. But this time, the strategy only lost the previous gains, and we are on par with the stock market. I will keep adding to the position as the market goes lower. When we recover, the SPXL will recover faster, and the strategy will outperform.

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.

In today’s bearish market, I am adding new cash and buying. Even though it is hurting my net-liq short term.

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%
August 2022 $13,414.80 -$2,136.75 -13.74%
September 2022 $10,454.70 -$2,960.10 -22.07%


Our HFEA strategy lost value in September 2022 by -22.07% while the entire market lost -8.94%. Overall, the HFEA portfolio is down -22.22% while the entire market is down -21.23%. I think that is not a bad result, considering how leveraged the SPXL is. I expect the strategy to be lower, so I am pleased with this result.

HFEA charts

HFEA net-liq 09
Strategy Net liquidation value

HFEA net-liq 09
Strategy vs SPY Net liquidation value

Strategy performance vs. SPY

September 2022 was not a good month for this strategy as the SPXL lost significant value (remember, the leveraged ETFs work both ways – they go up 3 times, but they also go down 3 times).

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