How it handles difficult markets

The NASDAQ peaked in March 2000 and went on to fall 78%. The S&P 500 lost nearly half its value. The most speculative tech and telecom names, many of which had never earned a profit, were wiped out entirely.

This chart shows the strategy running through the entire bubble pop from 1999 to mid-2001. The broad-market gate detected the deterioration and moved the strategy to cash as conditions broke down. The equity curve shows the strategy stepping aside during the worst of the crash while the indexes were in freefall.

The worst financial crisis since the Great Depression. The S&P 500 fell 57% from its October 2007 peak to the March 2009 low. Lehman Brothers collapsed, the banking system froze, and forced liquidations cascaded across every asset class.

The strategy's broad-market gate detected unhealthy conditions in late 2007 and the strategy moved to cash and stayed there through the entire crash: Bear Stearns, Lehman, TARP, all of it. It re-entered in mid-2009 once the recovery was structurally confirmed, missing most of the drawdown while giving up only the first part of the rebound.

Greek sovereign debt spiraled, contagion spread to Italy and Spain, and in August 2011 S&P downgraded US government debt for the first time in history. The S&P 500 dropped 19% in a matter of weeks.

The market gate triggered and the strategy exited and sat in cash through the worst of the volatility, then re-entered once conditions stabilized. The equity curve shows a flat line where the market was whipsawing, exactly the behavior the gate is designed to produce.

February 2018: the VIX spiked from 13 to 50 in a single day, wiping out short-vol products and triggering a 10% correction in the S&P. Then in Q4, the Fed's rate-hike cycle, trade war fears, and a government shutdown pushed the S&P down another 20%.

The broad-market gate caught both events. The strategy moved to cash during the February spike and stayed cautious through the choppy spring. It exited again in October 2018 and held cash through the December low. Both times it re-entered once conditions turned positive.

The fastest 30% drop in market history. From February 19 to March 23, 2020, the S&P 500 fell 34% as COVID-19 lockdowns shut down the global economy. Circuit breakers triggered multiple times. The Fed cut rates to zero and launched unlimited QE.

The strategy's equity curve shows a small dip, about 6%, before the broad-market gate pulled it to cash. It missed the worst of the March crash entirely. The flat stretch in the equity curve is the strategy sitting in cash while the index was in freefall. It re-entered in June 2020 and caught the V-shaped recovery that followed.

The Fed began the most aggressive rate-hiking cycle in decades, taking rates from 0% to 5.5%. The NASDAQ fell 33% from its November 2021 peak. Growth stocks, exactly the names this strategy holds, were hit hardest, with many dropping 60 to 80%.

The broad-market gate triggered in early 2022 and the strategy moved to cash and stayed there for most of 2022 and into 2023. The equity curve goes flat while the market was bleeding. This is the longest flat period in the strategy's history, but flat is far better than down 33%.

Escalating tariff announcements in early 2025 triggered sharp selloffs as markets priced in the impact of a potential global trade war. The S&P 500 dropped over 15% from its February highs as supply-chain disruption fears cascaded through tech and industrial names.

The broad-market gate detected the deterioration and moved the strategy to cash. The equity curve shows a brief dip followed by a flat stretch. The strategy waited on the sidelines while the tariff headlines whipsawed prices. Once conditions stabilized the strategy re-entered.

Geopolitical tensions around the Strait of Hormuz spiked in early 2026 as Iran-related escalation threatened oil transit through the world's most critical shipping chokepoint. Energy prices surged, and equity markets sold off on fears of broader conflict and supply disruption.

The strategy's broad-market gate triggered during the selloff. The equity curve shows the strategy stepping aside during the worst of the volatility and re-entering once the crisis de-escalated and market conditions normalized. The drawdown was contained to under 10%.