Surviving market crashes is one of the hardest things in investing.

If markets simply gained 10% every year, investing would be easy. But few can handle the mental pressure of a long and deep bear market. That’s why most of us will do anything to limit our losses.

A lot of you have asked me about the drawdown protection layer of my ETF strategy. This simple mechanism would have prevented a large part of the drawdowns during the Great Financial Crisis and other historical bear markets.

I named this mechanism The Ketchup Rule, and you will soon understand why. In this post I will provide some answers and show how it would have performed historically, using backtested data.

While the details of the rule are proprietary to maintain the edge for members, I hope my research into 150 years of market crashes will be inspiring reading for every investor.

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Market timing is impossible. Almost.

I’ve been investing and researching the stock market for more than 20 years. Anyone with just a little experience in this field has heard this saying over and over again:

Time in the market beats timing the market.

And to a large extent, I agree. There is a school of technical analysts and the like who attempt to predict future price movements based on various patterns, usually involving stop-loss mechanisms, but I have yet to see a consistently successful method.

So, as long-term investors, what can we do to limit the drawdowns?

When I finally adopted a more humble investing mindset, I started building an investment system consisting of the few factors I found to actually work with a satisfying level of consistency in my research.

Without getting into details, this was mainly rooted in momentum effects, quantitative factors, and rotational asset allocation. If you’re curious, you can read more about the system I built in this article.

But regardless of how much I improved historical average returns when backtesting these methods, I still faced the same problem: The long and deep drawdowns during bear markets were a mental killer.

The question remained: How do I get through the worst bear markets without panicking and feeling I’m losing everything?

My best solution

The system I eventually built was based on monthly closing prices. It turned out this data was just as useful for avoiding the worst parts of a bear market as it was for creating high-return systematic strategies.

Before I dig deeper into how it works, let me just show you the results of the solution I settled on. What you see below is a backtest using historical price data for the S&P 500 in a log-scale chart.

The blue line shows 150 years of price development for the S&P 500 (including its reconstructed historical index prior to 1957).

The orange line is the improved version using The Ketchup Rule. In 91% of the months it simply tracked the S&P 500. In the remaining 9% of the time it held cash.

It may seem surprising that a strategy that simply switches between the index and cash can outperform the index in the long run. The explanation: Rather than predicting tops and bottoms, it acts as a circuit breaker using a fixed rule.

So, how does it decide when to switch to cash and when to enter the market again?

It’s surprisingly simple. It uses only one input: The monthly closing prices of the market index over the past 12 months.

It runs three checks on these numbers, and if all three fail, the system moves to cash. In any other case it stays fully invested.

I’ve used plain cash (with 0% gain) in all my data as a conservative assumption. In practice, the rule could also be implemented using T-bills, gold, or any other asset that doesn’t have a high correlation with stocks.

How I formed the backtest

At this point, the critical reader will point out that backtests are full of potential pitfalls and biases to be aware of, which is entirely true.

The worst of them all, if you ask me, is look-ahead bias, where decisions made at each historical moment have access to future data from the same dataset.

Here’s what I did:

At the start of each month, the algorithm only looked at the past 12 monthly closing prices. Yes, just these 12 values. No input from future data or from anything else.

Then I applied the three checks from The Ketchup Rule on these price values, and the output decides whether to invest or move to cash until the next monthly check.

That’s it.

Any ketchup coming out?

We all know this situation: A newly opened bottle of ketchup, and nothing is coming out even though we’re holding it upside down.

We knock on the bottom and watch the slow movements inside. Seconds feel like minutes. Slowly but surely the ketchup moves towards the exit, and all of a sudden… SPLASH!

This is how the worst and longest bear markets often turn out. The market declines for a while, gravity sets in, and finally panic spreads and everyone heads for the exit. This is what we call the capitulation phase.

Why does this happen so consistently? Because under the surface, market price action is driven by human psychology. Just as positive momentum drives speculative bubbles on the way up, negative momentum creates an emotional feedback loop on the way down, fueled by fear and loss aversion.

The Ketchup Rule works because it identifies when the negative momentum has built up to a level where a capitulation phase has historically become highly likely.

It’s not possible to predict or time the markets, but the situation described above is common to almost all of the long and steep declines we’ve seen in the past 150 years.

In fact, it was so consistent across multiple datasets that I decided to incorporate it into my systematic strategy.

As mentioned in the beginning, I generally don’t have much faith in market timing, and I don’t believe anything can be predicted (which is why I prefer to stay fully invested). But I found this effect to be so consistent in limiting losses from long bear markets that I didn’t want to miss out on it.

How it handled historical crashes

When I initially did the backtest and saw the patterns behind the pricing rules, my dataset covered price data from 1945 to 2020.

Later on, I extended my testing to other indices and to a longer history. This only confirmed the consistency, as The Ketchup Rule held up remarkably well, also on the out-of-sample data from before 1945.

In the following, I’ll give you an overview of the most critical bear markets in the last 150 years. The listings will show you:

• The duration of the decline from peak to bottom.

• The full duration from peak to new highs, using The Ketchup Rule.

• The number of months spent in cash.

• The drawdown when using the rule and for the S&P 500.

• The return over the full duration, using the rule vs. the S&P 500 (measuring at the end of the month when the rule reached a new high).

An important note here is that this data is based on monthly closing prices only. This means drawdowns measured on a daily basis would most likely have been deeper, both with and without the rule.

Also, for regular readers, please be aware that these are not results of The MarketFighter Strategy. I use The Ketchup Rule as a core part of the strategy, but what you see below are results of this rule only.

The Panic of 1873, 1872-1879

Starting out with one of the longest bear markets in history, The Panic of 1873 resulted in 15 months in cash. When the drawdown strategy was finally back in positive territory after 88 months, the S&P 500 was still down 18.5%:

The Panic of 1907, 1906-1908

Also known as the Knickerbocker Crisis, this crash only took the drawdown strategy about half as far down as the S&P 500:

The Wall Street Crash, 1929-1932

The monumental crash that led to the Great Depression in the 1930s left the enhanced strategy with more than 2.5 times as much capital as the S&P 500:

The Oil Shock Bear Market, 1973-1974

In the 1970s, the oil crisis caused 17 months in cash during a long decline, in which the enhanced strategy came out roughly 15% ahead of the index:

Black Monday, 1987

On October 19th, 1987, the US stock market fell more than 20% in a single day. Due to the pace of this event, the rule didn’t catch it, and it fell with the index. The full decline lasted 4 months, and due to 1 month in cash, the strategy still reached a new high before the S&P 500 did:

The Dot-Com Bubble, 2000-2002

The big tech crash in the early 2000s caused 13 months in cash and left the strategy with a drawdown only half as bad as the S&P 500:

The Great Financial Crisis, 2007-2009

As the worst crash since 1929, the GFC was another great test for The Ketchup Rule, resulting in a drawdown of -17.3%, while the index itself was cut in half. The strategy came out roughly 50% ahead as it reached a new high as early as 2009:

The COVID-19 Crash, 2020

Just like the 1987 crash, the COVID-19 crash happened so fast that the rule didn’t kick in. And in both cases, this was a good thing, because an exit would have caused a huge lag during the quick V-shaped recovery that followed.

I could have included the 2022 bear market here, but despite being fresh in many people’s memory, it was a significantly milder decline than any of the major historical crashes listed above. The Ketchup Rule came close to triggering an exit, but it held through the full drawdown and came out equal to the market.

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There are no miracles

To avoid misunderstandings, I want to briefly discuss what this is and what it’s not. First of all, it’s a strategy that can potentially take out the worst parts of severe market crashes using simple rules.

As you saw in the numbers above, it held up quite well during the worst bear markets. At the same time though, we should keep in mind that:

• It won’t eliminate drawdowns.

• It won’t exit during the early phases of a bear market.

• It won’t protect against flash crashes (like 1987 and 2020).

• We don’t know if it will continue to work in the future.

To be transparent and also show when it didn’t work well, here’s a Top 5 of the worst losses the rule suffered across the whole dataset. This happened when the market rose while the rule was in cash.

Most of these relative losses occurred during bear markets where the rule still came out ahead overall.

Take this for what it is. For me, it’s the most consistent bear market protection I’ve seen, working with as few false alarms as possible. I’d rather take part of the drawdown than miss the recovery or get caught in frequent false alarms.

The chart earlier in this article shows the full picture with all the good and the bad phases over the past 150 years.

How I use The Ketchup Rule

This rule could be added to any other strategy as a means to protect against severe market crashes. I run The MarketFighter Strategy, which consists of three parts:

1. The Ketchup Rule

2. Sector rotation using relative momentum

3. Factor rotation using relative momentum

Once a month, when the closing prices are in, I check all three of them. If The Ketchup Rule triggers, I sell. Otherwise I buy the two ETFs my system picks (#2 and #3). The time between the monthly checks is a freeze period, in which I never do any trading, no matter what happens.

While most of my own capital is invested using this strategy, I own some individual stocks as well in a smaller portfolio. When The Ketchup Rule triggers, I may sell a few of these names as well to limit losses.

As mentioned, the rule can be applied as an add-on to any other strategy. For inspiration, the two charts below show how The MarketFighter Strategy would have managed The Dot-Com Bubble in 2000-2002 and The Great Financial Crisis in 2007-2009, using the combined logic of the three parts above.

An important reminder

While I’ve been following this approach with my own money since March 2021, I have yet to experience a move to cash myself.

The Ketchup Rule hasn’t triggered a move to cash since 2008-2009. You could say it has done a great job in not moving to cash during my five years of executing the strategy, but I still have limited out-of-sample data on this.

As always, remember that past performance is not a guarantee of future returns. Personally, I find value in consistently good past performance, and I believe this increases my chances of success, but nothing is ever guaranteed in finance.

I hope you found this article inspiring. If you’re interested in more data-driven market research and strategic insights, you can subscribe for free.

If you want full access to The MarketFighter Strategy and the monthly trading signals (including those from The Ketchup Rule), simply become a paid subscriber and join our growing community.

Thank you for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

Hi friend 👋

This is the monthly performance report for The MarketFighter Strategy. It’s the simple rules-based strategy I’ve been following for more than five years and share with subscribers in this newsletter.

Every month I give you a fully transparent update on how the strategy performed over the past month, as well as over a longer time horizon.

Hundreds of members are already actively tracking the strategy, and I appreciate your feedback and support. Thank you to everyone who is following along!

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Our September

The community surrounding the strategy keeps growing, and so does the attention from all angles. Over the course of September my work was published in three other publications, and I was interviewed by a Substack expert blogger.

You can find all these posts at www.marketfighter.com.

In the meantime we just reached 4,000 subscribers, with more than 200 members now actively tracking the strategy. Your trust means a lot to me, and I’m very excited to have you all with me on this journey.

In terms of performance, the strategy took a breather after a strong run, registering a minor loss of -1.05% in September. Meanwhile, the MSCI World Index gained 0.92% (both in EUR). The S&P 500 had a small loss of -0.45%.

It’s worth noting that the US Dollar had a strong month against the Euro, which means EUR-based investors experienced higher total returns than USD-based investors.

Monthly performance

The chart below shows the performance of the strategy (blue) compared to the MSCI World Index (gray) month by month in 2026:

As usual, all numbers I present in these reports are measured in EUR and based on the underlying indices (not accounting for individual fees or taxes). The S&P 500 is measured in local currency (USD).

The small underperformance in September was very similar to what we experienced in June and represents nothing out of the ordinary.

Over the past 26 years, the strategy has averaged 7-8 months of outperformance every year, and 4-5 months of underperformance. Many years have of course been better or worse than these averages, but it gives you an idea of what has been typical.

If you’re a USD-based investor looking for more US-specific numbers, I have collected a lot of historical data and comparisons in this article:

➡️ I Switched My Strategy to USD and My Benchmark to S&P 500. Here’s What Happened.

2026 Year-To-Date

The chart below shows the accumulated returns the strategy has generated so far in 2026. I have included the S&P 500 as well (still measured in local currency).

Despite the small loss in September, the strategy is still 18-20% ahead of our market benchmarks in 2026, and still on track to beat the market for the 6th time in 6 years since I started trading the strategy with my own money.

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ETF allocations in September

Again, the system was allocated to the same two ETFs in September as in the previous months:

This marked the fifth consecutive month without having to interfere with the system or make changes to positions.

Monthly breakdown

Our exact monthly returns in 2026 can be found in the table below, along with market returns (based on the MSCI World Index) and the difference (alpha) between them:

The allocations for both sectors and factors have been more consistent than in most years. This is usually a sign of long and strong trends, forming a great foundation for the momentum-based strategy to thrive.

Despite this month’s minor dip, the strategy is still 18.46% ahead of the MSCI World Index in 2026.

Updated annual returns

I was recently invited by the Substack publication Macro Notes to write an article for their 60,000 readers about my strategy (read it here if you’re interested).

As part of writing this article, I updated my calendar-year returns table with the latest figures for 2026 YTD (as of last week):

If you’re not part of this journey yet, don’t forget to subscribe. I write a number of free articles with strategic and data-driven market insights every month.

If you want full access to the strategy and receive the monthly trading signals, simply upgrade to a paid subscription to join us. (Psst: If you’re on iPhone or iPad, you can get a lower rate by purchasing directly at marketfighter.com in a browser, instead of through the Substack app. You will still get full access in the app afterwards!)

Thanks for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

This is the monthly trading signal from The MarketFighter Strategy. Our two ETF allocations for October are now ready.

I’ve been trading the same simple strategy for more than five years with great results. Every month I get a trading signal from my model, which dictates which two ETFs I will be holding for the next 30 days.

The strategy is entirely rules-based and not affected by anyone’s opinion. Now I share every step with a growing community of rational investors in this newsletter. During September my work was shared in four other publications here, here, here and here.

If you’re just here for the trading signal, feel free to scroll down to find it! 👇

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September in brief

In September, the strategy was once again allocated to the Energy Sector and the US Value Factor. Both of these positions have significantly outperformed the market since I entered them earlier this year.

Market commentators and analysts would say the month was dominated by rising bond yields, while strong corporate earnings supported the stock market. All of this is just noise in my view, and my entire focus is on following the rules of the strategy.

This month, we slightly underperformed our benchmarks and came out with a minor loss. This was mainly due to falling oil prices and a resulting decline in the Energy Sector ETF.

The strategy is still up around 33% year-to-date, outperforming the market by around 18% as I’m writing this. These numbers are measured in EUR.

As always, I’ll publish a fully updated performance report with September data and year-to-date figures within a few days after the trading signal.

The new trading signal and the ETF allocations for October are only accessible to MarketFighters. Upgrade below to join the club if you’re not a paid subscriber yet.

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Hi Friends 👋

This little community of like-minded rational investors keeps growing, and it’s a real honor for me to welcome all of you and answer your questions!

A couple of months ago, I did a Q&A session for paid subscribers only. This was a great way for me to answer your questions and learn more about your thoughts, ideas, and experiences.

I thought it was time to do this again, now that we’ve become a bigger group.

Drop your questions below

You can ask me anything in the comments section below, and I will do my best to answer within the next few days.

Also, feel free to write comments about your general experience, questions to the other MarketFighters, or simply say hello and tell us why you’re here.

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Hi Friend 👋

Today, I want to share some eye-opening results from recent research that might completely change your approach to active stock-picking.

It goes against the common belief most of us share that stocks in general go up over time. Most of them don’t. In fact, most stocks underperform cash over their full lifetimes, according to new data.

This has a tremendous impact on how we should allocate our money, and investors who position accordingly will stand a much better chance of high returns.

If you own any individual stocks like I do, read on.

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What new research reveals

Let’s start with the facts. If you’ve read any of my previous articles, you will know that I’m a strong believer in research and evidence found in data. My strategy is based on probabilities and facts, not opinions or discretionary analysis.

Earlier this year, Hendrik Bessembinder published a significant study of individual stock returns named One Hundred Years in the U.S. Stock Markets.

The outcome hasn’t received the level of attention I believe it should.

Bessembinder studied the returns of 29,754 individual stocks listed on US exchanges over the past 100 years from 1926 to 2025. These are his main findings:

While these numbers are all eye-opening, none of them are as game-changing as the number I referred to in the title of this article. We’ll get to this shortly.

The findings above confirm that stock returns are heavily skewed. A very small number of stocks account for the wealth creation of what we perceive as the market, while a long tail of individual stocks are left with negative or mediocre returns.

If you’ve come across the name Hendrik Bessembinder before, it’s probably due to the first version of his groundbreaking study, which was published in 2018.

In this first undertaking, he came to all the same conclusions. But what happened since then is that the skewness became even more extreme, concentrating all wealth creation on an even smaller number of companies.

Why stocks are not “the market”

There’s an extremely important point hidden in these data. One that is likely to change how many investors approach the market.

We all know that “the market” has gone up by roughly 10% annually over the past century. But this is only true if we see the market as a market-cap weighted version of the US stock market.

What does market-cap weighted mean? It means you don’t simply measure the average return of all stocks. Instead you weight the stocks by their size (market cap value). Following this approach, Nvidia’s returns account for 6.4% of the total market return, while most stocks account for less than 0.1%.

Under the hood, most market-cap weighted indices like the S&P 500 act as passive momentum engines, letting the winners run and cutting the losers.

The result is an index where performance is heavily carried by a few high-flying names of extraordinary size. Most importantly, it does not represent the performance of a typical stock.

With a few statistical assumptions, we can extract the following annual returns (compound annual growth rates = CAGR) from Bessembinder’s data over the past 100 years of US stock market data:

This means, if you had randomly picked a portfolio of individual stocks and sized them equally (not weighted by market cap), you could expect a negative return in the long run!

I was shocked the first time I saw these figures. This single number (the median stock return) might completely change our view on active stock-picking.

To illustrate how the median and the mean (average) can be so different, I created the chart below. My idea was to split all stocks into deciles (groups of 10%) sorted by how much wealth they created for shareholders over a 20-year period.

The actual numbers on the y-axis are just an example to illustrate the concept:

The dashed yellow line illustrates the mean or the market-cap weighted average. This is what’s generally referred to as “market return”.

The dashed red line represents the median. This is the typical stock return you get if you pick randomly, and exactly half of the market is doing better and the other half is doing worse.

The simple math behind this is, of course, that a stock can gain indefinitely on the upside, while it can never lose more than 100%.

Why the average investor underperforms

When faced with cold, hard facts like these, you would expect investors to move away from active stock picking, and many have indeed done so in recent years.

But most of us don’t like to identify ourselves as “average investors”. For many years, I thought I would be able to somehow find my own way of predicting the winners. I guess most of us share similar traits, and this goes a long way to explain why the average investor underperforms so badly:

It’s not for fun when the world’s most respected investor Warren Buffett advises his family and everyone around him to simply invest their money in a low-cost S&P 500 index fund.

So, why do we keep picking individual stocks anyway? I believe it comes from a combination of factors:

1. Entertainment
   Owning an index fund often feels like watching paint dry. Following a number of individual stocks is a lot more fun.

2. Overconfidence
   It’s a well-documented human bias that we are too confident in our own ability to predict future winners.

3. Lack of knowledge
   We expect an average market return, because we’re not aware of the difference between market returns and typical stock returns.

The underperformance of the average investor is not only due to picking individual stocks, but also to bad (biased) timing when entering and leaving positions.

And yes, I acknowledge that there is a small minority of people in this world who, like Warren Buffett in his younger days, can actually pick winner stocks with a significance that almost rules out factors of luck and deceiving randomness. But these are few. Incredibly few, according to data.

Consequences for stock-picking

This leaves the rest of us with a sobering realization. Investing in stocks is often taught as the default way to increase wealth in the long run: Just buy a well-diversified portfolio of stocks and hold them through ups and downs.

This sounds like good advice, because we’ve heard it so many times. But according to Bessembinder’s research, there’s a crucial difference between buying a portfolio of hand-picked stocks and buying a market-cap weighted index fund.

While the index fund has a long term expected return of 10% annually (or 7-8% when adjusting for inflation), a portfolio of randomly picked stocks has an expected return close to 0%.

This puts us in a special situation as active stock pickers. It forces us to decide:

I know this is a bit provocative. I do own individual stocks myself. But to be completely honest with ourselves and defend this choice, we have to assume we are not only better but significantly better at identifying tomorrow’s winners than the majority of people are, to defy the mathematical odds.

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What rational investors do

If you happen to have special skills or a strong belief that you are among the small group of people who can outperform the market with some level of consistency, you can safely skip the remainder of this post ;-)

For the rest of us, there’s nothing wrong with investing actively in individual stocks. The important thing is that we are aware of our odds in the game we’re playing.

Personally, despite my knowledge of the irrationality, I still own a number of individual stocks. I keep these in a small portfolio next to my serious money (all of which are allocated to my ETF strategy). There are a few reasons I still own these stocks:

• Entertainment. Many of us like this seemingly intellectual game, although the rational side of me knows better.

• Diversification. It gives me a bit of diversification to my ETF strategy.

• Taxes. I’ve had them for a long time, and there’s a tax benefit for me in not selling right now.

That being said, if the goal is to optimize wealth in the long run, the rational thing to do for most people will be index investing or systematic investing.

Indexing has a built-in momentum engine that rides the winners and cuts the losers. This approach doesn’t win every single year, but in the long run it beats most other strategies.

Disciplined buy-and-hold indexing can be seen as the simplest form of systematic investing. This is a category of investment strategies aiming to generate higher (or less risky) returns using mathematical rules.

How I switched to a systematic approach

When I first came across the concept of systematic strategies years ago, I was too inexperienced (and frankly, too overconfident) to realize the value of them.

But the more market research I studied, the more I gave in to The Humble Investing Mindset, leading me to accept that I can’t outsmart the market. At least not without a systematic approach.

Index investing works because it eliminates much of the human bias that usually affects active stock-picking. It selects its stocks based on simple mathematical rules, leaving out emotional decisions and overconfidence. It rides the winners that grow big and avoids all the small fish that never succeed.

Taking advantage of my engineering background, I did this myself, and that’s what most of my newsletter is about. While indexing is the simplest and easiest form to implement, it’s possible to create strategies that generate even higher returns following a systematic approach.

When I accepted that momentum drives market-cap index returns, my next question was: Can you apply systematic momentum rules across broad ETFs with low correlation to achieve even better returns?

Since I started actively trading my own strategy in early 2021, it has outperformed the S&P 500 every year. In backtests it has done so in 22 of the last 26 years.

My system is really just a set of simple mathematical rules based on research findings. It selects two ETFs every month, and I allocate my money into them 50/50. I spend 15 minutes a month on this. The rest of the time, I don’t touch my portfolio. You can read more about my approach in this article.

The hardest part is maintaining the psychological strength to stay disciplined and stick to an approach like this, when all the noise in the world tells you to do something else. But my results and all the research behind them have given me a solid conviction that keeps me sticking to my strategy.

A reality check on market returns

The common narrative that “stocks go up 10% on average” simply doesn’t apply to individual stocks in general. It applies to market-cap weighted indices like the S&P 500 because of the way it is constructed using systematic momentum-driven rules.

The typical stock has a significantly lower return, with the median stock even generating a negative return over its full lifetime, according to Bessembinder’s latest studies.

Research reveals that our chances of identifying the few winner stocks of tomorrow are so small that we’re better off following a systematic approach. Indexing is the simplest form of systematic investing, but it can act as the gateway to even higher returns for those who dig deeper into systematic strategies.

If you liked this article, I would love to hear your thoughts in the comments. If you’re interested to learn more about my own systematic strategy, and how I managed to outperform the S&P 500 with ETFs, simply subscribe to this newsletter.

Subscribers receive a number of market insight articles like this one for free every month, as well as updates on my systematic approach.

Thank you for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

Today, we’re trying out something new. I asked my friend Investor Denis from Stay Invested to write a guest post on this publication for us.

Denis is a highly skilled and successful ETF investor from Germany with a large following on Substack. His approach is different from mine, but we share the same beliefs in discipline, long-term thinking, and not trying to predict the market.

I hope you will enjoy this piece. If you like it, you can get a lot more by subscribing to his publication. Handing over to you now, Denis.

Best,

MarketFighter

Subscribe to Investor Denis

It was in the evening in late 2019 that I was standing in my boss’s dark office when he said

“I will have to let you go.”

I’ve worked in research my entire life, and the problem here is there are too few permanent contracts. As per German law, you’ll have to leave after 6 years tops unless you’re not only bright but also hard-working and lucky.

And although my layoff never materialized (I was actually lucky), I told myself I never again wanted to be in a situation where I worried about money.

Because I loved my job and happily spent 12 hours a day in the laboratory, starting a side hustle to make more money wasn’t on my mind. I decided to dabble in investing instead.

Invest your money.

Let it grow.

Wait long enough.

Become work-optional.

Easy.

But where do you begin? In the US alone, there are over 4,000 public companies. There are 17,000 ETFs globally. You don’t know how to read a balance sheet or an income statement. You don’t even know what an ETF is.

And most importantly, how do you overcome the fear of investing if your uncle once invested his money and lost it all?

I thought investing was a scam but decided to give it a try anyway, as I didn’t know any other options. And made 3 mistakes immediately. They were rookie mistakes, but they shaped the investment strategy I adopted a few years later.

Mistake one: I went to my bank to get consulted on investing.

Asking the guy who had earlier onboarded me as a client seemed like a logical move. We went to an isolated room on the 3rd floor where he used a 20-minute questionnaire to determine my risk tolerance.

He ended up selling me a mutual fund managed by the bank for a 5% entry fee. My 10,000 EUR instantly became 9,500 EUR. It took me more than a year to break even. And because we had a Covid crash in 2020, I had to live with a temporary paper loss of 30%.

Never buy investment products from your bank.

Mistake two: I dumped a stock too soon.

My first stock was Coca-Cola. I bought 100 shares in November 2019 and received my first dividends ($20) a month later. I was euphoric. That payout felt like free money. I’d finally cracked the code.

Problems began when Covid became a global health crisis 3 months later. Coca-Cola isn’t a tech company, and its stock wasn’t among the first to recover. While I was collecting my quarterly dividends, the stock was still down. I was sitting on a paper loss and asking myself why I hadn’t bought Zoom or Amazon.

When I was close to breakeven in 2021, I sold Coca-Cola. Since then, the stock is up 55%. I can’t help but compare myself with Warren Buffett, given that he’s held Coca-Cola since 1988.

I was a beginner who expected quick gains. He’s an experienced investor who buys great companies at good prices and holds them forever. Lesson learned.

Don’t sell exceptional companies too early.

Mistake three: I got burned chasing dividend yield.

The next stock I bought was AT&T with a juicy 7% dividend yield. There was just one small problem I overlooked because I hadn’t really analyzed the company: It had an astronomical debt of $150 billion, roughly the size of Israel’s debt at the time.

The reason for the debt was an earlier acquisition of WarnerMedia, and AT&T didn’t manage to monetize that media empire. Eventually, it spun off WarnerMedia in April 2022 to merge it with Discovery Inc. and form Warner Bros. Discovery.

That’s when AT&T’s financial position improved. But in the process, the dividend was cut in half, and the stock also lost a significant chunk of its valuation.

A high dividend yield isn’t free money, it’s a warning.

A single line from an ex-banker showed me what investing should be like

For the next 2-3 years, I stopped chasing dividend stocks altogether and focused on growth stocks. My success rate wasn’t high. I made money more often than I lost it, but my gains of several thousand euros a year didn’t really move me closer to financial freedom.

A breakthrough came when I met (online) an ex-banker from the UK named David. You could easily tell he was a pro just by the words he was choosing to write articles on investing on Medium dot com.

When David got my attention, I started asking questions.

What’s the right portfolio allocation?

Which public companies will profit from AI?

Has he ever traded stocks?

David must’ve seen where I was going and told me to stop chasing get-rich-quick schemes. I kinda sorta knew that because my strategy wasn’t working. And then David said how he was investing:

“I reached financial freedom in 2002 solely by investing in dividend stocks and reinvesting my dividends.”

I wasn’t expecting this from an ex-banker. It’s boring, it’s not fancy, but this is why it works.

When someone drops the bombshell, you’re paralyzed. It took me several months to come to terms with David’s investment strategy. When I accepted the fact that dividends are the path to financial freedom, I took another month to find the dividend ETFs I’d be comfortable holding for longer than a decade.

I minimized the work it takes to manage my portfolio

I’ll tell you exactly why I went for ETFs instead of individual stocks.

My experience with Coca-Cola, AT&T, and a few other stocks I held before shows you always need to

• time your entry and exit points

• be on top of things to avoid catastrophic losses

• be able to read between the lines to get what management tries to say at public events

Portfolio management is work. But if you still get half of your stocks wrong anyway, that’s not building wealth, that’s wasting your time.

And while I still want to be able to pick big winning stocks, I intentionally reduced my exposure to them and made dividend ETFs the foundation.

This is how my portfolio is structured as of September 2026:

• Individual stocks: 12%

• Dividend ETFs: 55%

• Bitcoin: 33%

There are 50 to 2,000 individual companies in my dividend ETFs. Even if a couple of those companies go bust, my total payout will hardly be affected. That also limits dividend growth, but I’m OK exchanging it for peace of mind.

Stocks are volatile. My logic here is simple: If I’m right on my stocks, I’ll sell them for profit, pay capital gains tax (26,375% in Germany), and reinvest the profits into my dividend ETFs. If I’m wrong, the losses won’t wipe me out.

(I’m also a Bitcoin bull and I’m OK holding it through bear markets, the last of which just ended.)

Portfolio stability is important for building wealth long-term, and stability comes from dividend ETFs. It’s fine if my portfolio stays roughly the same for several months while I keep adding to the dividend ETFs. But it shouldn’t drop by, say, 50% unless a full-blown financial crisis hits.

My core argument for portfolio stability is this:

• Dividend payers tend to have moats

• Dividends are paid from free cash flow

• Companies with strong cash flows are less volatile when the market is stressed

Overseas markets pose an additional risk

I need to clarify why I chose dividend ETFs over index-fund ETFs.

My goal is financial freedom, which means being able to do whatever I want with my time. Freedom doesn’t necessarily come from a large portfolio. For example, your house could be worth $1 million. But because it’s an illiquid asset that also happens to require regular maintenance, living in such a house doesn’t make you free.

What matters is not portfolio size, it’s cash flow. It’s how much money arrives in your account every month, no matter what you’re doing. I want to grow my dividend payouts to my monthly salary and beyond.

Owning an index fund means having to sell it once you’re retired or work-optional. Selling it means trying to time your exit points, which may or may not work out. And in the worst, highly unlikely, but plausible scenario, you may have to postpone your retirement by years, if not a decade. It took the S&P 500 13 years to break out above the 2000 high again.

The only index funds I’d be comfortable holding are US index funds, which would introduce an additional risk for me. I monitor the EUR/USD exchange rate because I hold US stocks. They can go up or down by an additional 1% a day due to currency swings.

The rate I’ve always considered “normal” is 1,10. For most of 2023-24, the EUR/USD rate was between 1,06 and 1,12. But in 2025, it went from 1,02 to 1,19 and peaked at 1,20 in 2026. The reason for the weak US dollar is because Trump wants to boost export competitiveness and domestic manufacturing.

If you hold dividend ETFs, you never have to sell them. You never need to time the market. And the great news is that dividend payments grow over time.

3 reasons for that:

• You add to your dividend ETFs every month

• You reinvest your dividends

• Public companies tend to raise their dividends

Give yourself enough time and your cash flow will blow your mind after a decade. That’s my time horizon (or longer).

Here’s how I selected 5 dividend ETFs.

My criteria for ETF selection

All my ETFs are domiciled in Ireland where the currency is the Euro. So there’s no currency risk.

Ireland also has special tax agreements with other countries, which lowers the taxes the fund pays on its investments:

• Reduced withholding tax of 15% (instead of 30%) on dividends from US equities

• No Irish taxes for non-residents on dividends or capital gains

But I still pay capital gains tax and dividend tax in Germany

Here are my criteria for selecting dividend ETFs:

• Growth prospects of the 5-10 largest positions

• Getting paid every month (even though individual ETFs pay quarterly)

• Expense ratios below 0,5%

• Dividend yields between 3 and 5% (neither too low nor too high)

• Reasonable past performance to expect capital appreciation

• Limited exposure to the US

A comment on the last point: Of course I want exposure to the US. The country has the most developed capital markets where the largest corporations trade. But then I wouldn’t really diversify my portfolio. So I made sure I have European and Asian companies in the ETFs as well.

Here’s a list of the 5 ETFs I own:

1/ Invesco EURO STOXX High Div Low Vol (purely European ETF with no US exposure)

This ETF is based on European blue chips from financials, utilities, real estate, and energy. It’s the best performer in my portfolio. It has a yield of 3,5% and trades at an 11x earnings multiple.

This ETF uses a two-step filter. First, it isolates the top 75 highest-yielding stocks in the Eurozone. Then, it discards the 25 most volatile ones and keeps only the 50 most stable high-yielders.

2/ iShares STOXX Global Select Div 100 (21% of stocks are from the US)

The ETF includes US stocks such as VZ, PFE, AMGN, and PRU. The yield is 3,8% and the average Price to Earnings ratio is 12.

The ETF weights its 123 holdings by their net dividend yield. Smaller, high-yielding dividend payers have a much larger weight in the portfolio compared to standard global indices.

3/ Vanguard FTSE All-World High Div Yield (40% of stocks are from the US)

The ETF includes US stocks such as JPM, JNJ, XOM, CSCO, and MRK. The yield is 2,5%, Price to Earnings is 15.

The ETF is weighted by the market caps of the stocks that have higher than average dividend yields. This keeps stable megacaps at the top, which helps price stability.

4/ VanEck Developed Markets Div Leaders (23% of stocks are from the US)

These are fundamentally strong dividend payers across international markets. Some of the stocks are VZ, PFE, and PEP. The yield is 3%, and it trades at 13x earnings.

The ETF offers global value diversification across both developed and emerging dividend payers.

The ETF weights companies by “dividend stream” which is calculated as tradable shares times dividend per share. The result is most are the companies that literally pay out the largest total dollar/euro amounts of cash dividends globally.

5/ SPDR S&P Global Dividend Aristocrats (52% of stocks are from the US)

The foundation of this ETF is companies with long track records of increasing payouts.

In the US, dividend aristocrats must increase their payouts for 25 consecutive years. However, European and Asian companies rarely follow the US culture of steadily hiking dividends every single year.

To build a global fund, SPDR lowered the requirement to 10 consecutive years of increasing or maintaining dividends. This captures durable global businesses without excluding entire continents.

Some of the names here are VZ, PFE, UPS, and CVX. The dividend yield here is 4,6%. The ETF trades at 16 times earnings.

Some dividend yields seem a little too low, like 2,5% for the Vanguard FTSE ETF. This is the yield you’d get if you bought the respective ETF right now. I started buying them over 2 years ago when the yields were higher, between 3,5% and 5,5%. In the meantime, all of them have appreciated, which naturally reduced the yields. That didn’t change my investment strategy.

There are trade-offs to this investment strategy

There’s naturally some overlap in the companies various ETFs hold.

The argument against this strategy could be redundant management fees between 0.29% and 0.46%. While this is true, selling one ETF to add to another would mean creating a tax event (and losing 26,375% of my capital gains immediately) and reducing diversification.

For example, 3 ETFs hold VZ. Selling two of them because of one stock doesn’t make sense to me. The ETFs contain other companies from different continents. It’s the level of diversification I actually pursue.

Another potential downside of my dividend ETFs is they contain no Big Tech (no Microsoft, no Meta, no Google, no Nvidia, and so on). Those are the companies with the largest moats, and they still have insane growth potential. But their dividend yields are too low, and none of them are included in my ETFs. This means I’m missing out on some capital appreciation.

Capital appreciation is great but it’s not the main goal of my strategy. Goal number one is cash flow. As long as those dividend yields stay between 3% and 5%, I can buy roughly the same amount of ETF units every year. If the ETFs appreciate too fast, I’ll eventually buy fewer units, and my cash flow won’t grow as fast.

Better to be boring than poor

The strategy is incredibly boring but it works.

Since I selected the ETFs, I’ve been executing in the simplest possible way: Adding to them once a month as soon as my paycheck arrives.

Traditional advice is to automate your contributions. I didn’t do that. It gives me pleasure to manually transfer money from my checking account to my brokerage account. Every month, I add to one ETF I didn’t add to last month, and reinvest the dividends received.

The % of my paycheck I invest varies from month to month but it’s never below 25%.

I bought the first ETF in May 2024 and haven’t skipped a month ever since. I’d love to show you the time evolution of my portfolio but my broker (Degiro) doesn’t offer this option on a desktop.

This screenshot shows the paper gains for individual ETFs without dividend payments. My net worth is steadily on the rise, and this is why I’ll continue to execute.

Final words

Figuring out my investment strategy took a few years and trial and error. I lost money in the process but found what works for me.

I’m happy with how my portfolio grows. The dividend payouts are on the rise, I have peace of mind, and I know the number of years I’ll need to reach my freedom number. More importantly, this strategy has vastly outperformed my earlier returns from buying and selling individual stocks.

The main message of my newsletter Stay Invested is to stay invested. Time in the market is more important than timing the market. To reach financial freedom, we talk about dividend ETFs, individual stocks I consider buying, and Bitcoin.

If this resonates, hit Subscribe. I’ll keep sharing what my dividend ETFs are doing, which stocks I’m buying and selling, and my long-term plans for Bitcoin.

–

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.

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Financial freedom is the goal. I provide you with concrete investment ideas to help you achieve it.

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This is the monthly performance status for The MarketFighter Strategy. It’s the systematic strategy I have followed for the past five years and share with subscribers of this newsletter.

As always, I’ll give you a fully transparent look into the monthly performance, my comments on the current status, as well as an update on the full year so far.

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Strong results again in August

I’m deeply grateful for the growing number of investors joining me on this journey every day. The pleasure is even bigger when I can show this level of excess returns that current subscribers have witnessed.

August was no exception with a return of 5.46% while the MSCI World Index returned 1.50%. The S&P 500 gained 2.62% over the same period.

The chart below shows the performance of the strategy (green) compared to the MSCI World Index (gray) month by month:

As usual, all numbers I present in these reports are measured in EUR and based on the underlying indices (not accounting for individual fees or taxes). The S&P 500 is measured in local currency (USD).

I always say that any serious investment strategy should be evaluated in years or decades, not months or weeks. Anyone can have a few good or bad months, but it doesn’t mean it will continue this way forever.

There’s no doubt that those of us who follow this strategy have had a great run recently, but this predicts neither good nor bad returns for the near future.

What I really care about is long-term consistency, and I would much rather be measured by this. I recently wrote an article about it, in which I also provided a USD-based return overview for the strategy. Find it here, in case you haven’t read it:

➡️ I Switched My Strategy to USD and My Benchmark to S&P 500. Here’s What Happened.

Year-to-date status

Below is an accumulated chart of the returns generated so far in 2026. I have included the S&P 500 as well (but be aware that it is not currency-adjusted).

Regardless of how we measure it, the strategy is having an above-average year, generating significantly higher returns than our benchmarks, and also higher than the averages for the strategy itself.

We can’t know how long this will continue, and I will never attempt to make predictions. I simply keep following the same rules as I have done for 66 months now.

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ETF allocations in August

The system held the same two ETFs in August as in the previous four months. This time both allocations outperformed the market benchmarks in a strong month without much volatility. These were our positions:

A couple of readers have asked if we should worry about single stocks accounting for more than 20% of the weight of the ETFs we use for the strategy.

Compared to a standard market-wide ETF, 20%+ may seem high, but when using factor- and sector-focused ETFs it comes as a natural side-effect that a few major players often take up a significant fraction of the invested amount.

Historically, this higher concentration has often been an advantage, helping secure excess returns compared to benchmarks. Personally, I’m not particularly worried about it, as history suggests the system has done well over time with this setup.

Monthly breakdown

The table below shows the exact performance of the strategy on a monthly basis compared to the market (the MSCI World Index), as well as the alpha (the difference between our return and the market return):

Our allocations for both sectors and factors have been remarkably steady so far this year. The most important number for me is the 20.92%, representing our excess return compared to the world index.

This is already above the average annual alpha for the strategy. However, as mentioned before: the current performance numbers (or allocations, for that matter) do not help us predict what will happen in the remainder of the year.

There are many strategies out there presenting higher returns than this one. The problem is almost always what happens in bad times. I follow this strategy for its high floor and consistency, more than for its absolute ceiling.

Coming up next

This publication has gained a lot of traction recently, and a growing number of interesting people are reaching out to me. This has led to exciting new collaborations.

Two weeks ago, I participated in this collaboration article together with six other amazing writers from the Substack Finance space, about how we invest:

➡️ Seven Figures: A Roundtable

Next week I will share my first guest post in this publication with you. It’s being written for us by another Substack Finance writer with a different perspective on ETF investing. I hope you will enjoy it.

If you’re not part of this journey yet, don’t forget to subscribe!

If you want full access to the strategy and receive the monthly trading signals, simply upgrade to the paid subscription to join us. (Psst: You get the best price by doing this through a web browser and not inside the Substack mobile app!)

Thanks for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

This is the monthly trading signal of The MarketFighter Strategy. The two ETF allocations for September are now ready.

First of all, a warm welcome to the 1,000+ new faces who joined since last month! Every month here begins with a trading signal that decides my investments for the coming month.

The strategy is entirely rules-based and not affected by anyone’s opinion. I’ve followed it with my own money for more than five years. Now I share every step with a growing community of rational investors in this newsletter.

If you’re just here for the trading signal, feel free to scroll down to find it! 👇

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Another great month in the books

For the past five months, the strategy has been riding the same two waves consisting of the Energy Sector and the US Value Factor. When the rules of the strategy point to the same allocations for several months, it’s usually a sign of strong trends in the market.

This is exactly what we have seen. In August, we outperformed both the MSCI World Index and the S&P 500, as we have done for most months of 2026 so far. This time the outperformance was carried by both of our allocations, and not just one. The strategy has now returned around 33% in 2026 year-to-date (in EUR).

August was a relatively quiet month in terms of volatility and major market events. Monthly updates from other sources will probably dig into AI-related earnings, capex spending, and new hawkish Fed signals.

None of that matters to this strategy. It deliberately ignores the noise from media narratives and after-the-fact analysis to focus only on what I have found to work: The patterns defined by relative price momentum.

In a few days, I will publish the full performance report with updated numbers for August. This will show exactly how far the strategy is now ahead of the markets in 2026 as well as month by month.

The new trading signal and the ETF allocations for September are only accessible to MarketFighters. Upgrade below to join the club if you’re not a paid subscriber yet.

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Hi Friend! 👋

I’m deeply grateful for all the new investors across the world who join The MarketFighter Strategy every day. Welcome to all of you.

While I live in Europe (Denmark) myself, a large part of you subscribers live in countries using currencies other than EUR and different benchmarks than the MSCI World Index.

Roughly a third of you are based in the US. This article is mostly dedicated to readers trading in USD, but others will probably find it interesting as well. I will measure my strategy in USD and compare everything against the S&P 500.

I hope you will enjoy all the charts as much as I did!

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Re-evaluating from Euros to Dollars

When I built my systematic strategy, it was only intended for myself and my family, and I didn’t plan to share it. That’s why all data in the system is in EUR to match my local currency.

From time to time I get messages from readers in the US who compare their numbers to mine, wondering why the returns don’t match. The main problem here is the currency.

In this post, I will explore how the MarketFighter Strategy has performed from the perspective of a US-based investor:

• Measuring returns in USD

• Comparing to the S&P 500

• Comparing to the MSCI World in USD

Finally, I will mention a few other factors that may affect the outcome.

Full history in USD

Let’s kick this off with the most obvious question: How did the strategy perform over the full period (backtest and live trading), if we measure everything in US Dollars?

I compare with the S&P 500 and the MSCI World Index in USD (starting in index 100, all index price returns, not accounting for taxes or trading fees). I’ve traded the strategy since March 2021. All data before this point is backtested.

If the chart makes you skeptical, I’m fully with you. But this is what long term compounding does when a persistent edge is allowed to compound over many years. I have triple-checked the numbers, and everything looks correct.

So, how do you read this chart? What you can immediately tell, is that the strategy has delivered a massive excess return, regardless of whether you compare to MSCI World or the S&P 500.

What you can’t easily tell is the distribution of the excess return. For most people, a 26-year compound effect is hard to grasp or relate to. So, to give a better visual idea of what following the strategy in USD would have looked like, I decided to split the full history up in 5-year intervals.

Historical performance in 5-year intervals

The following charts are all constructed the same way and based on the same data as the one you saw above. The only difference is each covers its own 5-year period, and I reset each of them to index 100 in the beginning. The interval goes from January 1st to January 1st in the respective years.

To me, these charts are easier to grasp for the eye. If you combine them, you would get the initial 2000-2026 chart (except for the last period since January 1st, 2025).

Key learnings from evaluating these charts

Scrolling down through these charts, there are a few points worth noting:

• The strategy significantly outperformed both USD-benchmarks in all of the 5-year periods.

• The excess returns were the strongest during the crisis years of the first two intervals (particularly 2000-2002 and 2008-2009)

• Outperformance was stronger during “the lost decade” for US stocks in the 2000s than while US stocks thrived in the 2010s.

• The strategy reaped the benefits of the US market when it was strong, and moved to European factor ETFs when it was weak.

These visualizations are as new to me as they are to you, and I must admit it is extremely satisfying for me to see that my strategy has performed so well, regardless of currency (USD vs. EUR) or benchmark (S&P 500 vs. MSCI World).

Still outperforming in 25 of 26 years?

A lot of you have already read the post where I displayed performance in EUR:

➡️ My Investment Approach that Outperformed the Stock Market in 25 of 26 Years

The obvious question is: Does the claim of the title still hold? Changing all data to USD-based numbers and switching the benchmark to S&P 500 does change the numbers, but not as much as one could have thought.

To sum it up, the USD-version of the strategy only beat the S&P 500 in 22 of 26 years. The four losing years were 2011, 2012, 2014 and 2016. But here’s an important detail: The worst relative underperformance measured (in 2012) was just -2.4%.

And to complete the picture, the USD-version of the strategy beat the USD-version of the MSCI World Index in 24 of 26 years. Very close to the 25 of 26 years achieved by the EUR-version.

The currency effect

Getting back to my point in the beginning of this article: The main reason for the varying performance numbers seen from a USD-based investor vs. a EUR-based one, is the currency movements.

People tend to underestimate this. I think it’s a common belief that the EUR/USD relation is somewhat steady. But take a look at the chart below to get an idea of how much it actually swings:

Over the past 26 years it has moved up and down in an interval between 0.82 and 1.60. This has a massive effect on the experienced market returns each year.

Personally, I find currency fluctuations annoying, as they add noise to the actual equity returns. But I try to simply ignore them, as the effect tends to smooth out over time.

Don’t get fooled by the numbers

We have established currency as the most important difference between the returns I display, and what you may find yourself. Here’s a quick list of other factors that can alter the returns and explain why two people trading the same strategy will never see the exact same returns:

• Reading indices vs. ETFs

• Reading specific ETF implementations

• Measuring Net Totals vs. Price Returns

• Trading fees

• The actual buy and sell prices achieved

• Tax regimes

All of this unfortunately makes comparing return metrics inherently difficult.

A note on account types

Speaking of taxes: To be honest, the topic of foreign account types and taxes is far out of my comfort zone. I have very little knowledge on rules and tax regimes of countries other than Denmark.

So, while I don’t give advice, I need to mention one thing here, since this is a US-focused post: if I had the option to trade my strategy in a tax-deferred account, I would jump at it immediately to avoid the ongoing capital gains tax.

In Denmark this is not an option. We have no such thing as a non-taxable account. Still the returns of the strategy have been far superior to buying an index fund and just letting it compound.

In the US you have both IRAs (Roth and Traditional) and 401(k)s (Roth and Traditional as well) which all allow you to trade without ongoing capital gains tax.

This is of course relevant for readers in all countries where tax-deferred accounts exist. If you don’t have this option, don’t worry. Despite the heavy Danish tax system, the returns of the strategy have still been very good to me.

Backtesting vs. real trading

Now, let’s take a look at realities. I love backtesting strategies. Only when you have a completely rules-based strategy, you can create a backtest to see how it would have performed. And only when you backtest a strategy, you will know if it has (or rather had) an edge.

But I’m also aware of the many pitfalls to backtesting. Results achieved after the backtest are the only true measure of success, and the ones that mean the most to me.

The final performance chart below covers the period where I personally traded the strategy with my own money. This was initiated on March 1st, 2021 after finalizing the backtest:

This chart reflects the raw performance of the indices the strategy trades, measured in USD (like all the charts above). It does not reflect my trading account, which is measured in Danish Kroner and is affected by my personal trading fees and taxes. These are very individual parameters.

Regardless of whether we measure in USD or EUR (or Danish Kroner) I’m more than satisfied with the results so far. During these 5 years and 5 months of real trading it has:

• More than doubled the S&P 500 returns

• More than tripled the MSCI World returns

• More than tripled my money

These are the results that allowed me to quit my job as a software engineer earlier this year, and I’m beyond grateful for my findings.

Will this continue in the future? I often get this question, and to be quite frank, nobody knows. That’s how markets are. You can never guarantee anything for the future.

What I do know is that the strategy relies on market anomalies that have existed for decades, if not centuries. These are caused by human psychology and instincts that Homo Sapiens developed thousands of years ago.

That’s why I’m confident enough to trust most of our family funds with this system, but you can never guarantee anything in financial markets.

Ready to join?

If you found this article interesting, and you’re not part of the journey yet, don’t forget to subscribe. I provide a number of free articles like this one every month.

If you want to receive the monthly trading signals and get full access to the strategy, simply upgrade to the paid subscription to join us. (Psst: You get the best price by doing this through a web browser and not inside the Substack mobile app!)

Thanks for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

This is the monthly performance update for The MarketFighter Strategy. It’s the systematic strategy I have followed for the past 5 years and share with subscribers of this newsletter.

As always, I will give you a fully transparent look into the monthly performance as well as an update on the full year until now.

Subscribe now

Extended outperformance in July

Back in June, we registered the first negative month for the strategy in 2026, underperforming the market, which was in positive territory.

July marked a great comeback for the strategy with a total return of 3.59% while the MSCI World Index was flat, registering a minor loss of -0.17%. The S&P 500 followed the world index with a small -0.13% decline.

The chart below shows the performance of the strategy (orange) compared to the MSCI World Index (gray) month by month:

As usual, all numbers I present in these reports are measured in EUR and based on the underlying indices (not accounting for individual fees or taxes).

A month-by-month review is not necessarily the best way to evaluate a long-term strategy, but I like the overview and I know a lot of readers find value in it as well.

Personally, the performance of any individual month does not affect me in any way. Of course, it’s a pleasure to register a new month of market-beating returns, but it doesn’t change anything for me. I simply keep sticking to the same formula as I have done for the past 65 months.

Below is an accumulated chart of the returns generated so far in 2026. By popular demand, I have included the S&P 500 as well (but be aware that it is not currency-adjusted).

ETF allocations in July

The system held the same two ETFs in July as it had done in June. But while US Value outperformed and Energy underperformed in June, their roles reversed in July.

The Energy Sector ETF outperformed the market significantly by more than 12%, primarily due to a major increase in oil prices.

Meanwhile, the US Value ETF underperformed by around 5%, mainly because of a sudden decline in semiconductors and AI-related stocks, some of which currently happen to be classified as value stocks.

We often see this pattern: when one of the ETFs underperforms, the other outperforms. It doesn’t always work like that, but in recent months this pattern has dampened the volatility of the strategy significantly compared to the broader market.

The diversification benefit of this strategy comes not only from picking ETFs over individual stocks, but also from allocating across two ETFs that in most cases don’t have a big overlap.

The monthly breakdown

In the table below, I have provided the exact performance of the strategy on a monthly basis compared to the market (the MSCI World Index), as well as the alpha (the difference between our return and the market return):

You may also notice that the allocations of the strategy have been remarkably steady so far in 2026. Energy has been the favored sector in 6 of the 7 months, while the same can be said about US Value on the factor side.

The most important number for me is the 15.64%, representing our excess return compared to the world index.

This is already above the average annual outperformance of the strategy. However, as I mentioned in the previous performance report: The current performance numbers (or allocations, for that matter) do not help us in any way in predicting what will happen in the remainder of the year.

A couple of weeks ago, I posted an article revealing all the monthly returns of the strategy during the past 10 years. If you find it interesting, it can be found here:

➡️ Monthly return history for the MarketFighter Strategy

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Why two people will never experience the same returns

I love the feedback I receive from all of you. It helps me improve this service and figure out which topics deserve a deeper dive.

One thing I’ve seen a few times (especially from readers trading US-listed ETFs) is that their returns differ from the numbers I present. It’s important to note that two people will never experience the exact same returns when trading this strategy.

Here’s why:

1. Indices vs. ETFs
   First of all, the numbers I present in these reports are based on the underlying indices and not on a particular set of ETFs. I do this because there are tons of ETF implementations available across different regions of the world, and I can’t cater to all of them. Their values may fluctuate, but they will all be close to the value of the underlying index.

2. Currency fluctuations
   The second factor is currency. While I present numbers in EUR, many subscribers trade in USD, GBP, or another currency. This means your return numbers will be affected by your currency’s movement against the EUR every month.

3. Trading and implementation

   Finally, the implementation of the strategy matters. The exact price you get when you execute a trade is unique to you and will affect your total return numbers. On top of that comes trading fees, which are again highly individual.

But while all these factors can give slightly different numbers month by month, I believe they will tend to even out in the long run (unless a major and permanent currency shift occurs).

In some months, you will see a better return than what I present, and in some months it will be worse. While it can cause a bit of frustration, it tends to smooth out over time, as it’s primarily driven by currency fluctuations.

I have plans to look further into this soon, as I want to find a better way to accommodate more of the different ways this strategy can be implemented.

Next steps

If you found this post interesting, and you’re not part of the journey yet, don’t forget to subscribe. I provide a number of free articles every month.

If you want to receive the monthly trading signals and get full access to the strategy, simply upgrade to the paid subscription to join us. (Psst: You get the best price by doing this through a web browser and not inside the Substack mobile app!)

Thanks for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

Welcome to the monthly trading signal of The MarketFighter Strategy. With the closing prices for July in hand, the ETF allocations for August are now ready.

The strategy is experiencing strong growth at all levels at the moment. In July, it outperformed all the major stock indices, and a significant number of new faces are joining us on this journey every day now.

Welcome to all the new subscribers who joined since last month, and to everyone who upgraded to follow the strategy. I’m incredibly grateful for the overwhelming trust and support!

At the start of each month, I send out the new monthly trading signal to all the MarketFighters (paid subscribers). If you’re still on the free tier, I would love to have you join us and get full access to the trading signals.

If you’re just here for the trading signal, feel free to scroll down to find it! 👇

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This project is growing fast!

Before we dig into the actual trading signal, I just want to briefly share some good news with you. Thanks to all the subscribers who upgraded to the paid tier in July, this little publication is now officially a Substack Bestseller.

This is a result of your trust in the project, and it means it will now be easy for new subscribers to see that the MarketFighter Strategy is trusted by a significant number of investors. I can’t thank you all enough!

July was a great month

On the financial side, the good news continued. Our allocation for July was the US Value Factor and the Energy Sector. We outperformed the MSCI World Index as well as the S&P 500. This extended our year-to-date lead over both market benchmarks.

The roles of our value and energy allocations reversed from June, where we had the same allocation. This time the Energy Sector significantly outperformed the market, while US Value lagged, with a steep decline in Micron being one of the main causes.

The stock market in general experienced unusual volatility and a heavy rotation out of semiconductors and AI-related stocks. We managed to avoid a lot of this volatility due to allocating money based on price momentum rather than narrative. The Energy Sector did particularly well in hedging against this.

As always, I will publish the full monthly performance report a few days after the signal, when I have updated all the numbers. This will show exactly how much the strategy gained in July and how far we are now ahead of the markets in 2026. Stay tuned!

Now let’s dig in to the new trading signal and the ETF allocation for August. The following content is only accessible to MarketFighters. Upgrade below to join the club, if you’re not a paid subscriber yet.

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Hi Friends 👋

I hope you’re all enjoying the summer! I’m currently on vacation in Italy with my wife and our two boys. I prepared most of this post before we took off, but I didn’t want to keep you waiting until we’re back home.

This post is about returns, psychology, and transparency. Unfortunately, in finance, it’s common to only display the wins and the good parts. I strongly believe that trust is built by communicating transparently about wins as well as losses.

That’s why I’m now presenting the full return breakdown of my strategy for every single month during the past 10 years. I will compare these to the market and you will see exactly when it did well and when it did not.

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Open track record

Actually, you don’t see this a lot in finance: A long-term open track record, revealing the performance of all trades going 10+ years back.

Many of you subscribers have told me that the transparency of my data and the open performance reporting are among the core reasons you decided to follow along.

I am very grateful for that. And I can promise you, I’m never going to hide bad results. These are as much a part of the process as the good ones.

Most of my writing so far has been focused on comparing returns by calendar year. I like this interval because it tends to give time for temporary dips and spikes to fall into place.

But annual returns don’t show the journey and the psychological struggles that may have been present along the way. That’s why I’m doing a fine-grained rundown of monthly returns in this post.

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I start every month by sending out a performance update for subscribers to The MarketFighter Strategy: the investment approach I have followed for the past five years, which I’m sharing in this newsletter. It’s a strategy that beat the market in most years since 2000.

In this post, I will give you a transparent look into how the strategy performed in June and how far we are ahead of the market in 2026 so far.

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First negative month in 2026

The strategy has had a great run in 2026, holding out until June before registering its first negative month. While the loss itself was small, it was a loss in both absolute terms and relative to market benchmarks.

The chart below shows the performance of the strategy (blue) compared to the MSCI World Index (gray) month by month:

For a long-term investment strategy, one month is an extremely short time frame. Historically, this strategy underperforms the market in 30% to 40% of the months. On a yearly basis, the numbers are closer to 5% to 25% depending on the timeframe and the benchmark.

Does this negative month impact me in any way? Absolutely not. I have experienced it over and over again. Outperformance tends to show up as a reward for patience and long-term thinking.

ETF allocations in June

The allocations of the system in June were identical to May, and so was the overall story of the month: while US Value outperformed the market (driven by Micron, among other names), the Energy Sector did the opposite.

But while the balance between them resulted in outperformance in May, their combined effect led to underperformance in June. One good takeaway from this is that I once again experienced a diversification benefit from following a two-legged strategy.

The monthly breakdown

In the table below, I have provided the exact performance of the strategy on a monthly basis compared to the market (the MSCI World Index), as well as the alpha (the difference between our return and the market return):

The table also shows the allocation in each month. These are the two ETFs the system decided to hold based on the relative price momentum rules that form the strategy.

Despite lagging the MSCI World in June, the strategy is still 11.04% ahead of the index year-to-date. Compared to the S&P 500, that number is 12.94% (not accounting for currency fluctuations).

It can be tempting to try to predict the relative performance of the coming months based on the recent data. But I must say, I have found no predictive value in how the strategy performs relative to the market. This means:

1. This month’s underperformance neither increases nor decreases the probability of underperformance in the coming month.

2. This first half-year’s outperformance neither increases nor decreases the probability of outperformance for the rest of the year.

Personally, this makes me calm, and it means I won’t spend my time worrying about what will and will not happen.

This is one of the benefits of a systematic approach. I don’t need to know what will happen next month, but I have a well-grounded expectation for the long term. I simply stick to my strategy, as I have done consistently since early 2021.

➡️ See this article for the full return overview of each year

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The international challenge

I’m increasingly proud of, and excited about, the growing community of international investors following my newsletter. Your trust and support mean the world to me.

I’m also quietly learning that a global audience is difficult to fit into one box, and I’m still working on ways to improve the diversification of my output, while maintaining its simplicity. The biggest challenges are:

• Currency
  A person who tracks this strategy in US dollars, British pounds, or Australian dollars, will experience different returns than what I’m presenting in Euros.
  

• Indices
  A lot of people, particularly in the US, are used to benchmarking all stock market performance against the S&P 500, while in Europe we tend to use the MSCI World Index.
  

• ETF implementations
  Due to local regulation, particularly in the European Union, retail investors across the globe don’t have access to trade the same ETFs.
  

• Taxing
  Every country has its own tax rules. Tax is an important topic, also for me, but I am not an expert in tax in other countries than Denmark where I live.

Consequently, I cannot display numbers that will fit everyone perfectly in these reports. What you see are the raw underlying index returns, measured in Euro and not accounting for potential taxes or other fees.

To illustrate one example of movements that affect the returns in good or bad direction, here’s the effect of currency changes between USD and EUR by month:

The takeaway is: if you were investing from a EUR-based account, you would have achieved a return 2.06% higher than someone trading the same ETFs from a USD-based account in June.

I am, however, starting to think about a potential solution to this challenge of displaying multiple variations of results. Hopefully I can give you some good news within a few months. Stay tuned.

If you found this post interesting, and you’re not part of the journey yet, don’t forget to subscribe. I provide a number of free articles every month along with the trading signals for a growing community of MarketFighters.

Thanks for reading!

Subscribe now

Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

It’s time for the monthly trading signal of The MarketFighter Strategy. With the closing prices for June in hand, everything is now ready for July’s ETF allocation.

For me, this past month has been special. I opened up the paid tier of my newsletter and more than eighty of you have already upgraded to become MarketFighters. I never expected this, and I am deeply grateful. Thank you!

It also means this is the first trading signal I’m delivering only to an exclusive club of like-minded and motivated investors. If you’re still on the free tier, I would love to have you join us and get full access to the trading signals.

If you’re just here for the trading signal, feel free to scroll down to find it! 👇

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June was less dramatic

After three months of heavy swings and high volatility, the financial markets cooled off a little bit in June. Iran, inflation, and AI enthusiasm again took focus. As I’m writing this, it seems our strategy registered a small decline for the month, but nothing out of the ordinary.

Followers of the strategy will know that our position in the Energy Sector underperformed the market. This was a result of the declining oil prices as the US and Iran came closer to a peace agreement.

On the positive side, our allocation to the US Value Factor performed strongly and beat the market. This was partly fueled by Micron’s positive earnings surprise.

Again, we experienced the benefit of a two-legged strategy, where one of them often performs when the other one doesn’t.

I will publish the full monthly performance report within the next few days when I have updated all the numbers. Stay tuned for this to see exactly how the strategy performed in June and how far we are now ahead of the market benchmarks in 2026 (last month it was 13.59%).

And now, let’s go straight to the actual trading signal and the ETF allocation for July. The following content is only accessible to MarketFighters. Upgrade below to join the club, if you’re not a paid subscriber yet.

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Hi Friends 👋

Two weeks ago, I opened up the paid tier of The MarketFighter Strategy, and more than 80 subscribers have already upgraded to get full access to the system.

You are the first generation of new MarketFighters outside my family, and this means a lot to me. I’m extremely grateful for your trust and engagement. The comments and questions I’ve already received show your genuine excitement.

Drop your questions below

I thought it could be valuable to set up a dedicated Q&A space exclusively for you. That’s the intention with this post.

You can ask me anything in the comments section below, and I will do my best to answer everything within the next few days.

Also, feel free to write comments and questions to the other MarketFighters, or simply say hello and tell us why you’re here.

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Most people treat investing as a game of intelligence. In reality, it’s a game of self-control. Accepting this was a major step for me towards higher returns. Leaving the I’m-smarter-than-others attitude was in the same category.

I was still a teenager when I bought my first stocks. Now I’m in my 40s, having recently left my 9-to-5 job thanks to investing with a certain mindset. But the road between those two moments was far from linear.

In this post, I will explain the lessons and the change of mindset that paved the way for this transition. These are the lessons I will teach my kids about investing once they’re ready to hear them.

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The biggest misconception

There will be people who disagree with my points in this article. But in my experience, the biggest misconception among retail investors is the way we’re taught to perceive investing:

Find stocks you believe in. Go for quality. Understand their business, their financial metrics, and their valuation. Buy when they’re cheap and sell when they’re expensive.

It sounds so simple. And most of us believe it because it’s the common narrative of finance, and it’s what we’ve always been told. If we’re just smart enough, we can simply pick the right stocks and beat the market. Right?

Numbers reveal a different story.

These calculations are from another article I wrote, based on data from 2002-2021. They show just how significantly the average investor underperforms the market as a result of overconfidence and regular human behavior.

I fully acknowledge that a few select people have managed to outperform the market for multiple years, but very few are able to do it consistently over a full investment career.

There are a good number of reasons why it’s almost impossible to consistently outperform a market-wide index through classic stock picking.

The median stock is a loser

This comes as a surprise to most people the first time they hear it:

While market-cap-weighted indices like the S&P 500 have seen strong and steady growth over centuries, the median stock had negative returns.

In other words: more than half of all stocks have lost money since they were listed, according to research. Headlines, media attention, and survivorship bias all make us believe something else.

Stock returns are said to be heavily positively skewed. This means a few select winners provide astronomical returns, while most of the remaining stocks are mediocre.

That’s why randomly picking a number of stocks just doesn’t work. You have to know which stocks will be the future winners.

David vs. Goliath

Say hello to overconfidence. When we start to play the game of analyzing businesses in order to predict the future winners, we’re up against the corporate Wall Street analyst teams dedicating their lives and 90 hours a week to find the next winners.

How are we supposed to have a chance in this game? And why do we think it’s possible to beat them?

I’ve always been fascinated by The Dunning-Kruger Effect: The cognitive bias where people with limited knowledge or competence in a specific domain greatly overestimate their own skills.

For many years, I was a victim of this myself. To some extent I probably still am. The ironic truth is that most people believe they’re smarter than most people.

This goes for timing the market as well. Looking at a chart in hindsight and spotting where you should have bought or sold seems so obvious. Of course we can do that. Overconfidence again (otherwise we would all be rich by now).

Humble realizations that formed me

On top of all this, we are all just human beings with human instincts and human psychology. While fear and greed were useful for us in our earlier history, they were not designed for navigating financial markets. Actually, they often have a negative effect and tend to drag us in the wrong direction.

Over more than two decades in the markets, these are the realizations that formed my humble investing mindset:

The mindset goes against a lot of common understanding of how an investor should think. Nevertheless, it works, and I will explain just how in a minute.

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Why I switched to ETFs

After many years of trial and error in my attempts to pick the right stocks and crack the code, I read Burton G. Malkiel’s famous bestseller A Random Walk Down Wall Street.

This is a highly recommended read, and it kickstarted the development of the mindset I’m describing. Ultimately, around 2019, I realized I was playing a loser’s game, like most other active stock pickers.

That’s when I switched to indexing and ETFs. Since the Great Financial Crisis in 2008, the indexing trend has become stronger and stronger, largely driven by the so-called Bogleheads community.

Buy-and-hold index investing makes so much sense. Instead of playing the stock picking game, where the odds are stacked against you, you simply buy the market and ride whatever trends and successes it brings. It’s a simple way to outperform the vast majority of investors in the long run — even professional Wall Street traders.

But there’s an important part that 90% of index investors miss: Buying the index is easy. Holding it across a full cycle and a market crash is not. But the only way to ensure you get the market returns is to never sell, no matter what! There’s no jumping in and out of the market. No trying to time the crashes.

Suppressing external influences

Settling on the humble mindset is not as easy as it sounds. First, you have to acknowledge that regardless how intelligent you are and how highly you rate your ability to read the market, you should not even try.

If you win this battle, the next one awaits: The external factors.

Imagine we’re in the middle of a market crash. Your friends are laughing at you for not selling. Your colleagues are shorting the market. And your neighbor now feels quite sure that we are entering an economic depression. All the headlines in the news are negative, and it feels like it’s the end of the world.

Do you have the patience and the discipline it takes to stay in the market through the darkest days? The truth is, we don’t know until we’ve tried it.

Sticking to a strategy

For a while I resolved to plain index investing for a simple reason: The expected average long-term outcome of buy-and-hold index investing is around 7-10% annually. For stock picking it’s around 3-5% according to research.

I’m a software engineer with a rational and mathematical mindset. Why did it take me so long to reach the conclusion above? Because I was suffering from overconfidence bias. I thought I was smarter than the rest.

People who make serious money in the stock market all have one thing in common: They have a well-defined strategy and they stick to it.

When people ask for my number one stock tip, it’s very simple: Stick to your strategy. If you don’t have a well-defined strategy, you’re playing with fire. Having a real strategy you trust and can stick to, that fits your personality, is often more important than what the actual strategy is.

It’s all about expected outcome

The more I thought about it, and the more I researched, the more it dawned on me: This idea of evaluating an investment strategy based on its expected returns was the best possible way for me to gain enough confidence to be able to actually stick to it.

Over time, I gradually moved my mindset from this perspective:

…to this:

Whenever I feel the doubt creeping in on whether I should deviate from my strategy, I think about the data. I think about the long-term expected outcome.

If I make an exception from the strategy (like simply buying and holding an index), I lose out on the expected returns of that strategy. My expected return falls down to the level of the average discretionary investor at 3-5%.

Optimizing further

Once I had established this mindset, a lot of things became more clear to me. The classic index investing became a necessary stepping stone towards something even better. I started investigating ETF-based strategies with higher expected returns than the standard market-wide index ETFs.

This led to a lot of research on factor investing. Factors like value, size, quality and momentum have been historical predictors of higher returns.

Certain countries and certain sectors have delivered higher historical returns as well. I was able to achieve a theoretical 2-3% higher expected average return with this information.

At some point I realized the only way to significantly improve my expected returns would be to develop an entirely mechanical system, that would allow for trading (to optimize for the best returns) but at the same time eliminate my emotions and biases.

Ultimately, I started trading this system back in March 2021 and haven’t looked back since. It has now beaten the MSCI World Index in 25 of the last 26 years, returning an average of 10% higher than the index every year.

It doesn’t do this by predicting the next winner, but by systematically tracking the sectors and factors with the highest expected returns.

In April 2026, it ultimately allowed me to quit my 9-to-5 job.

After trading it for five years, where the results kept materializing, I decided to publish the strategy and share it through this newsletter.

If you liked this post and want to receive more strategic insights, you can subscribe for free.

If you’re ready to leave traditional stock picking behind, join the other MarketFighters who follow my systematic strategy and execution every month. Simply upgrade to the paid tier to enjoy full access.

Thanks for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

Dear friends 👋

The MarketFighter Strategy has officially transitioned into a premium service for serious long-term investors.

To ensure full transparency for those considering a paid subscription, I wanted to tackle the ultimate question: How does this system hold up against the S&P 500?

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How does it compare to the S&P 500?

As a global investor living in Europe, I’m used to comparing everything against the MSCI World Index. It’s the closest match to the universe of stocks my strategy is exposed to across Europe and the US.

But I acknowledge that for investors living in the US, the common benchmark for all stock investing is the S&P 500, even though it only covers US-listed stocks.

It’s also worth noting that since 2010, the S&P 500 has significantly outperformed the MSCI World Index, mainly because of the Magnificent Seven stocks.

In this post, I have prepared a fully transparent comparison between my strategy and the S&P 500.

Comparing 1-year intervals

First, let’s take a look at the total return percentage generated by the strategy vs. the S&P 500 down to each individual calendar year:

The numbers in the chart do not account for taxes or trading fees, and they’re measured in local currencies. This means you will see different returns depending on your own currency.

As the chart shows, the strategy beats the S&P 500 in most years, but not in all years. In years where the S&P 500 is negative, the strategy tends to be significantly stronger (2000-2002, 2008, 2018, and 2022).

But I realized a bar chart with 54 bars may not be the best way to get an overview, and I did not develop this strategy to trade it for a single year anyway.

Comparing 3-year intervals

In the chart below, I have clustered the same data into 3-year intervals across the full period of my backtest (2000-2020) and the years I have actively traded it (2021-2026):

Now the long-term consistency shows. The strategy has outperformed the S&P 500 in all of the 3-year intervals of this century except one. Only in the 2012-2014 interval, where the momentum effect struggled, did the strategy slightly lag the index.

I had never done this comparison until I did the research for this article. In all of my backtesting and data checking, I had always been comparing to MSCI World, because it makes more sense to me as an investor living in Europe and trading both US and European stocks.

Seeing how well the system has actually performed for long-term investing against “the hardest benchmark to beat” is incredibly reassuring.

I’m also pleased to notice that the level of outperformance I found in the backtests has not decreased since I started trading it in 2021. Rather the opposite, but that probably comes down to randomness.

Developing backtests for trading strategies is a minefield of pitfalls and risks like overfitting, forward-looking bias, and survivorship bias.

Awareness of these helps a lot, but the only true measure of success is the performance measured after the backtest was executed and the strategy went live (known as out-of-sample data).

Read more about my backtest and how I developed the strategy in this post.

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Coming up on MarketFighter

I’m receiving a lot of questions and ideas from both new and existing subscribers, and it’s amazing to feel the engagement of this growing community!

This is a great source of inspiration for future articles I will be writing over the coming months, including themes like:

• How to stay disciplined and stick to a strategy

• Crashes and how to protect against the deepest declines

• Full historical monthly return breakdown of the strategy

• The strategy from a US and Dollar perspective

• What research says about market returns

• How to handle the emotional and psychological side of investing

• Life after quitting the 9-to-5 job

These educational articles and insights will remain open for everyone, while only paid subscribers will get access to the monthly trading signals.

The paid tier is waiting for you

Dozens of serious investors have already upgraded to the paid subscription and are now tracking the strategy.

If you want to continue having full access to the strategy and the monthly trading signals, don’t forget to upgrade.

▶️ Monthly Subscription: $45/month
⏩ Annual Subscription: $375/year

Thanks for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

The trading signals are going premium

Many of you have asked why I didn’t charge money for this service. I simply wanted to prove my worth and the value of the system before I asked anyone for payment. That’s why I have provided everything for free until now.

But with the continued outperformance and the time and effort I’m putting into this, now is the time to upgrade this to a sustainable service for the long run.

By funding this work, you can help ensure that I will continue delivering these trading signals and strategy updates for decades to come.

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What you get as a paid subscriber

With the paid subscription you will continue to receive the monthly trading signals of the MarketFighter Strategy for as long as you wish. The next one will be sent out on July 1st (for paid subscribers only).

This is the same system that recently allowed me to leave my 9-to-5 job, even though I’m still in my early 40s.

It has given me back my time, removed financial stress, and allowed me to design my life on my own terms. I’m hoping I can pass this experience on to others over the coming decades.

For those of you who have already been following the strategy for a while, these are the returns you have experienced so far:

Comparing to the market benchmarks, this is what 2026 has delivered:

🔴 S&P 500: 8.19%

🟡 MSCI World: 9.24%

🟢 The MarketFighter Strategy: 26.18%

And here’s the best part: 2026 is not just a single lucky year. The system has outperformed the MSCI World Index in 25 of the past 26 years. Scroll down to see how they compare year by year. 👇

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Pricing going forward

These will be the prices for the paid subscriptions going forward, including full access to all the monthly trading signals and portfolio updates:

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The free version

Free subscribers will continue to receive all the insights, articles, and the content I deliver in the newsletters.

However, you will no longer receive the monthly trading signals. If you want to know which two ETFs the strategy holds each month and continue tracking the strategy, you need to upgrade to the paid version.

A personal note

Beating the market is notoriously difficult. I’ve spent more than half of my life fighting the financial markets.

To be honest, I didn't build this system for anyone else. I built it for myself and my family. I wanted a way to outperform the market with high consistency and low effort, because I wanted to achieve early financial freedom.

I’m not a financial advisor, and I have no financial education. I’m just a computer scientist who found a way to get better returns on the stock market. These are the returns delivered by the strategy so far:

Personally, I will continue investing for my family using this system for decades to come. I can say without a doubt that following this strategy with my own money has been the best financial decision of my life.

Who knows if it will have a similar impact on some of you in the years to come?

I genuinely hope so.

Click here to upgrade to secure your access to the strategy and the trading signals.

Thank you for being a part of this!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

Every month I send out a performance update for The MarketFighter Strategy: The investment approach I have followed for the past five years, which I’m sharing in this newsletter. It’s a strategy that beat the market in 25 of the past 26 years.

In this post, I will give you a transparent look into how the strategy performed in May and how far we are ahead of the market in 2026 so far.

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In May we extended the gap

The last two months have been a joy for most investors. Especially for those invested in broad market indices or in AI/semiconductor-related stocks… or in the MarketFighter Strategy.

After slightly lagging the MSCI World Index in April, we were back to outperforming in May, having done this in 4 of the 5 months of 2026 so far. This chart compares the returns of the strategy with the world index (market) month by month:

To be fair, the performance of a long-term strategy like this should be measured in years and decades, not in months. Still it’s great to see that it continues the historical consistency and outperformance in 2026 so far.

The strategy stands on two legs:

• Relative factor momentum

• Relative sector momentum

In May, the sector pick (Energy) underperformed significantly. But because we combine two simple strategies into one, we didn’t experience a loss:

The outperformance of the factor pick (US Value) was even more significant. So much that by combining the two investments, we outperformed our market benchmark. This robustness comes from combining two strategies that don’t follow the same patterns.

Some of you have asked me why I didn’t combine with even more separate strategies. The truth is, I like to keep things simple, trying to get as big and stable returns as possible from as little effort as possible.

You could definitely add more legs or substrategies to the system, but it could very well lower the returns and it would in any case involve more trades and more effort.

The monthly breakdown

In the table below I have provided the exact performance of our strategy on a monthly basis compared to the market (the MSCI World Index), as well as the alpha (the difference between our return and the market return):

The table also shows the allocation in each month. These are the two ETFs the system decided to allocate money into based on the relative price momentum rules that are the foundation of the strategy.

Unlike the general market, we have yet to see our first negative month in 2026, and we extended our excess return to 13.59% above the world index. These numbers are all before taxes and trading fees and measured in EUR. They will not differ much in USD as the fluctuations between the two have been small in 2026 so far.

We can of course not expect a full year of only positive months. No strategy is guaranteed to do well in any time frame, and every year has had good and bad periods. But personally, I have a lot of confidence based on the historical track record of this strategy. From what we know so far, it seems we are heading for another strong year of outperformance.

➡️ See this article for the full return overview of each year

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You can read more about the full investment universe and the 15 indices and corresponding ETFs the strategy uses here:

➡️ Indices and ETFs in our investment universe

If you’re looking for the June trading signal and curious about which ETFs the strategy is currently allocated to, I wrote a separate article here:

➡️ The June 2026 Trading Signal

A personal note

When I developed this strategy and started trading it in early 2021, I had a feeling it would either turn out to be a beautiful illusion or it would be life-changing. Today, I can look back and confirm it was the latter.

As a result of my returns from the strategy, I was able to leave my 9-to-5 job one month ago to work with my passions for investing and building on my own, and to share my strategy with all of you in this newsletter.

New people are joining every day, and I’m grateful to experience the engagement and the interest with which my approach is being received. Hard work, consistency and discipline pays off — in life and in investing.

Thank you all!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.

The financial markets are now closed for May. This means our system has all the data needed to deliver the trading signal and the two ETF selections for June.

First of all, welcome to the 692 new subscribers who joined since I delivered the last signal 30 days ago. It’s a big pleasure for me to see the growth of this newsletter follow the growth of the investment strategy!

Before the first market opening of each month, I send out the trading signal provided by the systematic ETF strategy. The signal tells us which two ETFs the system will invest in for the coming month. This simple approach has outperformed the market in 25 of the past 26 years.

If you’re just here for the trading signal, feel free to scroll down to find it! 👇

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We had strong outperformance in May

The stock market in general continued the strong performance from April, and the past two months combined have generated double digit returns for both the MSCI World and the S&P 500 indices. This was mainly driven by a surge in AI and semiconductor-related stocks.

Our strategy did even better, outperforming both of the indices thanks to very strong development in the US Value position.

Interestingly, the value segmentation currently holds a significant amount of AI-related tech stocks like Micron and Intel. I don’t have an opinion on any specific companies, but it’s fascinating to see how the system picked up the early momentum in this field and allocated money into it.

As usual, I will publish the monthly performance report within the next few days when I have updated all the numbers. Stay tuned for this to see exactly how the MarketFighter Strategy performed compared to the market in May and how far we are ahead of the market benchmarks in 2026 so far.

The June 2026 Trading Signal 🔄️

For the coming month of June 2026, the MarketFighter Strategy will continue with an unchanged allocation compared to May. This means for the third consecutive month, it will be holding these two positions, equally weighted:

Despite the recent decline in the energy sector, its relative momentum still indicates a high probability of near-term outperformance. US Value looks exceptionally strong at the moment, particularly carried by semiconductors.

Be aware that the European listed ticker names vary from one exchange to another. I have listed the Xetra (German) tickers, but they have different names on the London exchange, for instance. In general, going by the ISIN code is safer than the ticker codes for ETFs in Europe.

➡️ See the full list of relevant ETFs for the strategy here.

Why no changes is a good thing

You may be wondering why the allocation is now the same for the third straight month. If this is a trading strategy, aren’t we supposed to trade?

Actually, it’s just a good sign. When the system sticks to the same allocation for several months, it’s usually a result of the same ETFs continuing to perform well. In most cases (like this) it means we’re making money.

My aim with this strategy was to keep the effort as low as possible, attempting to beat the market with as few annual trades as needed. I never wanted to be a day trader, but rather to build a system that would allow me to spend time on other things while it builds wealth.

Historically, the system has required an average of 9 allocation changes (selling one ETF for another). Roughly 4 for the sector and 5 for the factor. Months with no changes are very common with this setup, and I enjoy it every time it happens.

My opinion on the picks

I really try not to have an opinion on the selections the system gives me. But with the media, headlines, and recent market development in mind, it’s almost impossible.

It can be a real struggle to convince yourself to execute a trade that doesn’t match your current take on the market. And even though I have done this so many times over the years, it’s still not always easy.

Typically, when the system points to an ETF that has recently done well (like US Value at the moment), it feels good to continue with this. When it picks an ETF that has recently dipped (like Energy at the moment), it feels bad.

But as I’m sure you know, we can’t predict the future. And the truth is, we should try our best not to have an opinion on the outcome of the system or the direction of the markets. That’s what worked for me.

Don’t forget to subscribe for future trading signals, strategic investment insights, and occasional updates about my journey after I left the corporate world to follow my passions for investing, writing and building.

Thanks for reading!

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Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.