The S&P/TSX composite index fell another 3.86% today but I’m not worried. For my Canadian investments, I am following my HXU/XSB model and therefore have over 80% of my Canadian holdings in XSB units. The chart below illustrates how this model has performed since inception on 9/12/07. Whether such performance continues is of course unpredictable. As I have pointed out before, it is possible that this model is optimized to the market over the past year and may not work near as well in the future. Time will tell but I am sleeping better at night now than I would had I not moved out of most stocks and into XSB.
As for the US markets, the Nasdaq fell 2.64% today. My QLD/IEF model is one that I am comfortable with even though it has a lower CAGR than the QLD/QID model (43% vs 55%). The unsettling characteristic of the QLD/QID model is its maximum drawdown of 36% as compared to a maximum drawdown of 16% for the QLD/IEF model.
