The Iron Condor Pinnacle strategy is a conservative, non-directional, income generating, all weather strategy that is optimized for the following conditions:
- It’s optimized for the “New Political Era”. This strategy can handle the volatility that can come out of Washington DC, which can sell-off stocks at any time
- A yield curve that is flat where the bonds market is sending the message that the economy could slow in the next 6 to 9 months.
- Slowing corporate earnings that contracted -0.4% in Q119, -0.4% in Q219 and -2.2% in Q319; but investors so far are okay with earnings results.
- An expensive market trading at 18.5x forward S&P500 earnings as of early Jan 2020.
- A market that was choppy and range for the last 18 months where it was difficult to generate consistent positive gains using stocks, ETFs or indexes.
Characteristics and Returns for the Iron Condor Pinnacle Strategy:
- Pinnacle is a non-directional, all-weather strategy that can generate positive monthly returns in upward trending, downward trending, or sideways and choppy markets.
- We hold a maximum of 3 to 4 positions at any one time representing 30% to 40% exposure of the portfolio
- Each position represents 10% of the portfolio and is open for 2 weeks
- We hold sufficient cash in the accounts to make trade adjustments when volatility unexpectedly rises
- This strategy is conservative by construction, which allows us to sleep well at night because we have a low level of exposure, but we’re still able to generate solid monthly gains
- Targeted returns for the total portfolio are 2.5% to 5.0% per month after commissions
- It finished 2019 UP +36.8% realized after commissions
- Over the last 2 years, as of Jan 2020, Pinnacle is up 50.4%, the S&P500 index is up 19.8%, and the Dow is up 14.6%. Pinnacle has beaten the broad market by a wide margin.
- Capital preservation and safety are a top priority
- We have 17 years of experience in trading this strategy