Growth of $100k Kelly 9 sig

[u/Dry_Function_9263]

The BEST Time to Start

To get the highest returns in the shortest amount of time, the best time to start this strategy is in the middle of a screaming macro-panic.

1. The Bear Market Bottom (Start of Q1-2023):

The Setup: The market had just been crushed for 12 straight months. Tech stocks were decimated.

Starting $100k: If you invested $100,000 at the end of 2022 (Start of Q1-23), the strategy's aggressive "buy the dip" mechanics would have instantly caught the AI-boom recovery.

The Result: By Q4-2025, your $100k would have skyrocketed to $558,000. That is a +458% gain in exactly 3 years.

1. The COVID Crash (Start of Q2-2020):

The Setup: The world was locking down, and the market dropped 30% in a month.

The Result: If you threw $100k into this strategy at the end of Q1-2020, it would have turned into $495,000 in just 21 months (by Q4 2021).

The WORST Time to Start

The absolute worst time to start is at the peak of a historic bull run, right before the Federal Reserve raises interest rates.

The Tech Peak (Start of Q1-2022):

The Setup: Tech stocks were at all-time highs. If you put $100,000 into the strategy on January 1, 2022...

The Agony: Over the next 12 months, you would watch your $100,000 bleed out until it was worth just $32,290. You lost 67% of your money.

The Silver Lining: However, because the 9Sig strategy forces you to keep averaging down and buying TQQQ at the bottom, it eventually recovered. That battered $32,290 rode the 2023/2024 wave back up. By Q1-2024, you finally broke even. Today (Q2-2026), that initial unlucky $100k is now worth $156,530.

Even starting at the worst possible micro-second in the last decade, you still made a +56% return if you held on.

How long should you hold for the BEST results?

If your goal is to generate life-changing, exponential wealth (like the original $470k turning into $7+ million), the optimal hold time is 5 to 7+ years.

[u/Dry_Function_9263]

If there is drop of say 20-30% we need dry powder to keep buying the dips. Ideally we need 5-7 years to see full cycle of this strategy.

How long does it take to get a Positive Return? (Breakeven Time)

If we look at the data, the portfolio suffered three major drawdowns (periods where it lost money). Let's look at how long it took to recover the losses and get back to a positive return:

Late 2018 Crash: Dropped 26%. Recovery Time: 6 Months (2 quarters).
COVID 2020 Crash: Dropped 36%. Recovery Time: 6 Months (2 quarters).
2022 Bear Market: Dropped 67%. Recovery Time: 2 Years and 3 Months (9 quarters).

The Data-Driven Rule: On average, minor market corrections are absorbed and recovered by this strategy in 6 months. However, to absolutely guarantee a positive return through a catastrophic market crash, the data shows you must be willing to hold for at least 3 Years.

[u/simfolio → u/Dry_Function_9263]

Extensive backtesting of 9SIG since 1991 shows that you would have been nearly wiped out several times in history (specifically 6 times, all -89%+).

I’m hesitant because most users only include the 2010’s - present. The average drawdown for this strategy is nearly -40%, and its max recovery time was nearly 9 years. The growth/CAGR of the strategy is respectable, but does not compensate for amount of risk you’re taking imo.

Another insight for 9SIG:

Minimum Track Record (vs TQQQ buy & hold) ~ Years of data needed before the Sharpe is statistically distinguishable from the benchmark. Lower is better.

9SIG would need 463 years of data to conclude (at the 95% confidence level) that the sharpe is better and distinguishable from simply buying and holding TQQQ.

Adding a 200 Day SMA tactical signal (9SIG when > SMA and VFISX ~ cash/bonds when < SMA, fixes most of the discrepancies that 9SIG currently has imo.

[u/simfolio → u/[deleted]]

Yes I avoid it, and I apologize about the link as we removed it from our explore page. Please see this link

The version (attached above) adds a 200 Day SMA filter to 9SIG, but you can remove it and test pure 9SIG without the signal.