Market Diversity - Diversified Portfolio 42

As we look ahead to trading the Stock Index Portfolio 18 in June, our focus is on enhancing Market Diversity. The recent news cycle has been intense—yet we’re beginning to see signs that the market may be desensitized to some of these headlines. In other words, the same news no longer triggers the same level of enthusiasm or fear indefinitely. Of course, headlines could regain traction at any moment, so it’s important to blend strategies that perform well both during high‐volatility news events and in more “normalized” market environments.

One potential candidate for rotation in June is the Diversified Portfolio 42. Since July 2022, it has experienced just one losing month (-$785) on a hypothetical-backtest basis. More importantly, our analysis shows that this specific combination of strategies has held up well both historically and throughout the most recent news cycles. (As always, past performance does not guarantee future results.)

Why Diversified Portfolio 42?

• Only one losing month since mid-2022.

• News-Cycle Resilience: The mix of strategies was designed to weather headline-driven swings.

• Broader Market Exposure: Adds new markets—beyond the purely stock‐index focus—to capture different trends and reduce correlation.

Portfolio Composition

When we compare Diversified 42 to Stock Index Portfolio 18, the differences boil down to market diversity and position types (including a few that can hold overnight). In addition to the strategies already in Portfolio 18, Diversified 42 includes:

• 9 E-mini S&P strategies

• 3 E-mini Nasdaq strategies

• 4 Gold strategies

• 2 Silver strategies

• 4 Crude Oil strategies

• 2 Micro Bitcoin strategies

Of those, the E-mini Nasdaq, Gold, and Micro Bitcoin strategies can carry positions overnight—an important distinction if we see sustained moves outside regular trading hours. (4 Strategies Total)

What’s New?

The only new addition to Stock Index Portfolio 18 in the last week of May was Pulse NQ. By contrast, Diversified 42 is built entirely from existing strategies that we’ve been tracking throughout 2024 and early 2025.

Looking Forward

We’ll continue to monitor the start of June closely. If the broader market environment looks choppy or headline-driven, Diversified 42’s mix may offer better risk-adjusted returns than a purely stock-index-focused portfolio. Of course, if traditional stock indexes regain their leadership, Stock Index Portfolio 18—with Pulse NQ on board—remains a compelling option.

In short, June presents an opportunity: add market diversity when it makes sense—or stay concentrated in stock indexes if they begin to outperform again. Either way, our process remains the same: combine strategies that complement one another during both “news-heavy” and “normal” trading regimes.

The Portfolio Calculator has been updated through May 30, 2025, to include this portfolio.

Diversified 42 Portfolio

Hypothetical Performance Summary

$25 Round Turn Slippage and Commission

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Market diversity remains one of our core trading principles, and broadening instrument diversity beyond futures adds another layer of resilience. Stay tuned for upcoming research on automated futures‐options strategies currently under development.