Here’s a final look at the RYDEX model before we discard it onto the dust heap of failed good ideas. What you’re not seeing is the 4% drawdown metric during the life of the model, an exceeding low and exceedingly attractive risk factor. Note how RYDEX performed late 2008 compared to SPY. Although we were willing to live with the 1.3% load factor for the RYDEX funds, a closer analysis of our trade reports shows a 4.96% front end load for all class A transactions (retail traders), thereby effectively negating the otherwise modest, but consistent, returns. Although RIAs and other money managers can flip the Institutional rated shares on a considerably smaller fee structure, the utility of trading RYDEX for the average trader is NOT valid and we are dropping the model from our portfolio. It will be replaced by a new streamlined ETF model BQB that trades just 3 ETFs and rotates the allocations weekly.
