Profunds index and sector trading

[Namiar]

Was studying RUT-NDX hedges. They didn't work very well during the bubble, but once NDX and RUT started trading with a similar level of volatility (mid-2003), the hedging strategy starts to bear fruit.

Since July 1, 2003, the NDX-RUT hedgeing strategy that I've worked out has gained 14%. This is based on 50% of resources into a long fund and 50% into the short fund. Either NDX or RUT can be short or long depending on if OB or OS. There is action maybe 1 of every 20 days.

14% is not too bad considering your only "invested" 5% of the time, and the "investment" when it happens goes out 50% long- 50% short. An extra 7% per year should provide a nice turbo boost for the port.

I will make this spreadsheet available after I clean it up somewhat.

Also was studying MID vs. RUT and MID vs NDX. Will try and add the DOW this weekend sometime and see how it looks.