Originally Posted by
tomgoodman
My uneducated guess is that over a very long period of bull and bear markets, the Snider method would provide a lower but more consistent total return, due to the hedging features.
That's one of the key reasons why I like the method. It is designed to provide a consistent 12% annual yield over the long run throughout bull and bear markets. Does it do that perfectly? No. But it does it better than anything else I have seen. And you are right, that yield can sometimes be much lower than the market in a bull market. For example, I'm sure that most folks did way better in 2009 than I did with the Snider Method. But I'm not just looking at 2009. My objective is to invest long term for retirement, not be able to brag about some huge percentage return when the market has a really good year (because I know it will have really bad years too).
Here's an old article from Kim Snider's blog that does a good job of illustrating the difference consistency of return can make to a portfolio over time:
The Fred Fiasco
Also, here's an article (also from Kim's blog) about "risk adjusted return" that makes some interesting points along the lines of what you are saying:
Risk Adjusted Return