🔍 The Tactical Truth: What Decades of Data Say About Our 3-Asset Model
Backtest Insights from UPRO, Bitcoin & Gold — Why Tactical Allocation Wins
In the world of investing, there are three unavoidable truths: markets are cyclical, risk is real, and timing matters more than most are willing to admit. That's why we built the Tactical Allocation Model—a rules-based system that dynamically rotates between three of the most powerful macro assets: UPRO, Bitcoin, and Gold. Each one plays a very specific role in our framework, and each brings with it a unique return profile, risk behavior, and volatility signature.
Today, we're diving deep into the long-term backtest performance of these individual building blocks. We'll look at how each behaves in isolation—and why combining them in a tactical system isn't just smart, it's essential.
🔵 1. UPRO — The Growth Engine
28.91% Annual Return | Avg Gain: 12.45% | Max Drawdown: -19.75%
UPRO, the 3x leveraged S&P 500 ETF, is the heart of our growth allocation. Designed to triple the daily return of the S&P 500, it brings immense upside—but also serious risk.
✅ Backtest Highlights:
Despite its reputation as a high-risk instrument, our tactical model keeps UPRO’s risk surprisingly controlled. The average drawdown is just -4.06%, and losses are cut quickly. That’s the power of having firm rules around trend strength, volatility regimes, and macro overlays.
UPRO’s biggest win of 27.97% shows that even with leverage, the model doesn’t need moonshot trades—it needs consistency. With tight exits and strong trend filters, UPRO becomes a disciplined growth engine rather than a gambler’s bet.
🟠 2. Bitcoin — The Asymmetric Wild Card
33.85% Annual Return | Avg Gain: 19.96% | Max Drawdown: -20.40%
If UPRO is the engine, Bitcoin is the booster rocket. It brings asymmetric upside and macro-disruption potential—but only when used with precision. That’s exactly what our model is built for.
✅ Backtest Highlights:
What’s striking here isn’t just the headline return. It’s the discipline with which the model engages Bitcoin. Trades are rare and selective. The system enters only when volatility conditions are favorable, and it exits fast when macro filters flash red.
Bitcoin’s biggest win was a jaw-dropping 102.44%—a reflection of just how powerful a well-timed allocation can be. But more important is that the biggest loss never exceeded -17.24%, which is virtually unheard of in Bitcoin strategies.
This isn’t buy-and-hold crypto. This is tactically filtered participation—and it’s what makes the risk-reward truly exceptional.
🟡 3. Gold — The Quiet Defender
11.33% Annual Return | Avg Gain: 3.73% | Max Drawdown: -9.82%
Gold doesn’t grab headlines. But in the Tactical Allocation Model, it serves a quiet, crucial purpose: regime diversification and capital protection. And its backtest shows that reliability.
✅ Backtest Highlights:
Gold trades more frequently in the model than most expect—not because it’s always trending, but because it thrives during specific macro conditions: falling real yields, rising uncertainty, and volatility regimes.
Its drawdown profile is the best of the three, with a typical pullback of just -2.07%. This makes gold the ideal counterweight to leveraged equity exposure and asymmetric Bitcoin bets.
It’s not meant to outperform. It’s meant to stabilize—and it does that exceptionally well.
📈 What Happens When You Combine Them?
Now here’s the real power of the system: These assets behave differently for a reason. Each thrives under specific macro regimes. And by rotating among them—based on strict, data-driven signals—we can participate in upside while drastically reducing downside.
Our full tactical model averages around +23.8% annualized return over multiple decades, with significantly lower drawdowns than any individual asset on its own. Why?
Because the model doesn’t hold risk blindly. It waits for confirmation from:
Trend strength (MA crossovers, MACD, ADX)
Momentum and relative performance (RSI, ROC, relative to UPRO)
Volatility filters (VIX, GVZ, volatility-of-volatility)
Macro overlays (real yields, liquidity trends, dollar strength)
This disciplined structure avoids catastrophic losses and ensures that capital is only deployed when the probability is in our favor.
🔄 Why Tactical > Passive
Let’s get honest for a second: buy-and-hold works… until it doesn’t. It’s great in bull markets, but brutal in drawdowns. And the bigger your risk exposure (leveraged ETFs, Bitcoin, growth tech), the more devastating those losses become.
Our approach isn’t about predicting the future. It’s about reacting—objectively—to what the data says right now.
When the model holds UPRO, it’s because all systems are green. When it moves to gold or cash, it’s not fear—it’s signal.
This isn’t emotional investing. This is tactical risk control with a track record.
🧠 Final Thoughts: Know Your Tools, Trust Your Signals
Each of our model assets—UPRO, Bitcoin, and Gold—has a place. But it’s not about holding all three all the time. It’s about knowing when to hold which—and when to step aside.
That’s the edge tactical allocation brings.
That’s why we built this model.
And that’s why it continues to outperform—year after year, decade after decade.
🔒 Want the Live Allocation?
Each week, we update the model’s positioning and send:
📊 Current asset allocation
🔄 Trade alerts when the model shifts
📎 Clear rationale based on the 4-pillar system
🧠 Ongoing insight into trend health and macro context
Free subscribers get macro commentary and educational deep dives.
Paid subscribers get the full signals—so they can act with conviction, not confusion.
📄 Disclaimer
This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always do your own due diligence before making any investment decisions.
Since Bitcoin or even GLD did not exist, what other instruments do you use to backtest the strategy?
What happens when the GBTC is in a prolonged downtrend like in 2023? What other instrument do you use if any?