Growth Equities
Own strong US growth stocks while they rise. Step aside when they stop.
24%
a year, this strategy
11%
a year, S&P 500
$10,000 invested in 2003
2003 to 2026, tested without hindsight. Traded with the author's own money since July 2026.
It made money in 2008
+1%
this strategy, 2008
-37%
S&P 500, 2008
Worst fall since 2003: 29% against the market's 55%. A version tested from 1999 also gained 20% in the 2000 to 2002 crash, while the market lost 38%.
The idea holds up over 75 years
A simpler version, tested on every US stock back to 1951, fell far less in the worst decades. In the 2000s: 31% against the market's 57%. In the 1970s: 31% against 48%.
The catch: in calm, rising markets it can lag the index. Past results do not guarantee future ones.
Details
With and without borrowed money, 2003 to 2026
| Yearly return | Worst fall | |
|---|---|---|
| No borrowed money | 12.9% | -16% |
| About 1.9x | 24.3% | -29% |
| S&P 500, with dividends | 11.4% | -55% |
Backtests on QuantConnect, after trading fees and interest on borrowed money. The 1999 version (used only for the 2000 to 2002 figure) uses the S&P 500 instead of the Nasdaq 100 to judge the market, because the Nasdaq 100 fund only began trading in March 1999, and picks from a wider list of stocks. “Without hindsight” means it only picked from stocks it could have known about at the time. Results were rechecked on two independent backtest engines, and the live account's trades match the backtest's.
Every decade since 1951 (no borrowed money)
| Decade | Worst fall, strategy | Worst fall, S&P 500 |
|---|---|---|
| 1950s | -23% | -22% |
| 1960s | -16% | -28% |
| 1970s | -31% | -48% |
| 1980s | -18% | -34% |
| 1990s | -23% | -20% |
| 2000s | -31% | -57% |
| 2010s | -20% | -20% |
| 2020s | -21% | -34% |
A simplified research version on daily data, including companies that later failed. It skips the stock selection used today, so its returns are not comparable; it is shown only as long-run proof of the trend rule.
More: methodology and disclosures.