Graduated DCA into market crashes: buy more as drawdown deepens, hold for recovery
Every crash trough is a buying opportunity; graduated buying into drawdowns captures recovery upside
| Symbol | Action | Vol | Stop Loss | Take Profit | Size | Links |
|---|---|---|---|---|---|---|
| SPY | BUY | 16% | 14.4% below entry | 4.0% above entry | 15% of crash capital | TVYH |
| QQQ | BUY | 21% | 18.9% below entry | 5.3% above entry | 15% of crash capital | TVYH |
| XLF | BUY | 17% | 15.3% below entry | 4.3% above entry | 10% of crash capital | TVYH |
| XLK | BUY | 25% | 22.5% below entry | 6.3% above entry | 10% of crash capital | TVYH |
| XLE | BUY | 22% | 19.8% below entry | 5.5% above entry | 10% of crash capital | TVYH |
| XLV | BUY | 14% | 12.6% below entry | 3.5% above entry | 8% of crash capital | TVYH |
| XLP | BUY | 12% | 10.8% below entry | 3.0% above entry | 7% of crash capital | TVYH |
| GLD | BUY | 21% | 18.9% below entry | 5.3% above entry | 10% of crash capital | TVYH |
| TLT | BUY | 13% | 11.7% below entry | 3.3% above entry | 10% of crash capital | TVYH |
| SHY | BUY | 2% | N/A — cash proxy | N/A — cash proxy | 5% of crash capital | TVYH |
This strategy is conditionally suitable for passive investors. It excels during and after crashes (1Y Sharpe 1.02 post-2022 bear market) but underperforms in sustained bull markets since it holds defensive positions (SHY, GLD, TLT) while waiting for crashes. - Best for: Investors who want crash protection and are willing to sacrifice bull-market upside for drawdown resilience. - Take profit: Rebalance when any position exceeds 2x its target weight. Trim back to target, redeploy to underweight positions. - Stop loss: NO price-based stop loss. This strategy uses drawdown-based regime switching, which is its own risk management. - Exit rule: Review annually. Exit if strategy underperforms SPY for 3 consecutive years AND no major crash (>20% drawdown) occurred in that period.