The Golden Cross

The golden cross gets its own headlines. It mostly sold low and bought back higher.

The rule. Hold SPY on every day after its 50-day moving average closed ABOVE its 200-day moving average (a 'golden cross'), and hold cash (0% return) on every day after the 50-day closed BELOW the 200-day (a 'death cross'). Signals are read at the previous close, so nothing is traded on information you did not have. Benchmark is SPY buy and hold.

What actually happened.

• $10,000 became $42,456. The same $10,000 in Buy and hold (SPY) became $84,528. This strategy trailed the benchmark by $42,072.
• Compounded at 10.1% a year vs 15.3% for the benchmark.
• Best year: 2013 (+32%). Worst year: 2022 (-8%). This is not a smooth ride.

The catch. At its worst, this strategy fell -34% from a prior peak — shallower than the benchmark's -34%. Would you have held through that? Most people don't. That's the whole game.

The takeaway. The lesson isn't "this idea is stupid." It's that the simple, boring benchmark is harder to beat than the pitch decks admit. Before you try to be clever, respect the index.