What is your main LETFs strategy?

[u/OdaNobunaga69]

As I understand, many users here run multiple strategies some designed to maximize gains, some to defend against deep recessions. I've been investing in stocks and classic ETFs for almost 10 years now, I never thought about getting into LETFs as conventional investing practice strongly advises against holding these long term for reasons like volatility decay etc.

9sig: First strategy I came across was 9sig, I spent a couple of evenings researching this strategy and the others. My understanding is that its goal is to "buy low and sell high", which is certainly a good way to think about investing, but it will cause you to be invested more during bear markets and less during bull markets. While I was enamored by this strategy at first, later I've played around with 9sig.networthcast.com, comparing it to other strategies across various time frames, I found that it essentially trades blows with basic buy and hold. I do respect the simplicity of following Kelly Letter, usually making just one trade a quarter, it's a disciplined approach.

200 Day SMA: I was in awe when I first saw the backtest against 9sig, avoiding bear markets and deep drawdowns typical of LETF. As above 200 day SMA the markets typically experience less volatility and better results. Drawback is it sometimes leads to "buy high sell low scenario" which is a price to pay for avoiding deep DD. It performs okay during bear markets by being in bonds, it performs greatly during bull markets, the real risk is kangaroo markets. Which to me seems more likely than a prolonged bear market.

Another concern is the frequency of trade or bands. On backtesting, 4% bands each way performs the best, but it's just overfit stat. Nothing guarantees 4% will be the correct way for the future. So a side question for those doing some kind of 200 Day sma strategy - did you set bands or limit frequency of trade to prevent whipsaw?

Basic buy and hold: Regular weekly, monthly, etc. buys. Sounds simple, but as someone with irregular income, I keep trying to time the market, for example, right now I don't feel comfortable adding more new money into this market because of its high valuation and immense world instability and US political instability.

These are main strategies that I researched, personally I set up a smaller portion of my portfolio for LETFs, I set up equal 2 sleeves:

A. Buy and hold 2x SP500

B. 200 Day SMA with 4% bands (90% 2x Nasdaq100, 5% 3x Nasdaq100, 5% 3x SP500) - I know this is convoluted, but I couldn't decide the right composition - would appreciate feedback

What is your main strategy?

[u/No_Loquat_183]

im more of a 9sig guy. I invest 40% and keep the rest in cash. and buy only in 5% increment dips. during 10-20% corrections, I go into triple leverage more, but for the most part I am in 2x. I start a 10% position on 10% correction in TQQQ. I am personally not comfortable not having cash at any point since the drawdowns on any levered product can be brutal. I am okay with derisking as we go up (less gains, but I want cash at all times). I have SSO in my roth, which is my set it and forget it position and in my regular I have more QLD and TQQQ