L Shape Stagnation

Persistent crash with no recovery (Japan 1990s). Gold + utilities + short bonds + dividends only.

L-Shape Stagnation Hedge (Worst Case)

Total Return

+14.8%

Sharpe Ratio

0.23

Max Drawdown

-3.3%

Win Rate

56.7%

Alpha

-18.4%

Comp. Score *

0.03

Risk Parameters

Max Allocation13.0%

Stop Loss15.0%

Take Profit5.0%

Max DD Tolerance3.3%

Rebalanceweekly

Execution Guidance

Order TypeLimit

Entry RuleAlways hold some. Add more when SPY breaks below SMA200.

TimingWAIT FOR SIGNAL: Go max defensive ONLY during prolonged market downturn (3+ months). *

ScalingMaintain 5-15% allocation. Add during fear, trim during euphoria.

Positions — Vol-Adjusted Sizing

Symbol	Action	Vol	Stop Loss	Take Profit	Size	Links
GLD	BUY	23%	14.4% below entry	4.8% above entry	13.6%	TV YH
XLU	BUY	16%	9.9% below entry	3.3% above entry	19.8%	TV YH
SCHD	BUY	14%	8.9% below entry	3.0% above entry	22.0%	TV YH

▶ For Passive Investors (Buy & Hold)

This strategy has moderate long-term potential but requires monitoring. - Take profit: Take profit at +50%. This strategy is inconsistent — capture gains when available. - Stop loss: Reduce position by 50% at -25% drawdown. Consistency is only 57%. - Exit rule: Review annually. Exit if strategy underperforms its benchmark for 3 consecutive years.

Avg 5Y Return

24.5%

Avg 5Y Sharpe

0.13

10Y Return

47.0%

10Y Sharpe

0.01

HODL Composite

0.12

Consistency

57%

Suitable for passive