Cycle Trading

[Duma]

You don't need to be concerned about my ability to calculate yields. I think I have that mastered. Here is an exercise I went through this weekend.

Mutual Funds always list the 1 yr, 3 yr, 5 yr and 10 yr returns which is shown in the second grouping of numbers.

Using SPY as an example, note that the 1 yr yield in 18.3% and the 3 yr is 14%. So with the 1 year being higher I know that the actual yields for year 2 and 3 is something less than the 3yr number of 14%. I calculated that number and it is 11.9%. That number is in the 3 grouping of numbers. I have no way of knowing what year 2 and year 3 were exactly, but I don't know from these numbers that the average of the two years was 11.9%.

To me this is a much better way to show the numbers, but it takes too much math for most.

Check my math and see if 1 year at 18.3%, 2 years at 11.9%, 2 more years at 16.8^ and then 5 years at 12.4% give a total return of 262.8% and an annual 10yr return of 13.8%.