James Helliwell shows how Claude rewrote his ETF strategy in 30 minutes. The AI-built system delivered 15.3% annual returns with a 12% maximum drawdown during 2022, versus 20% losses for a traditional 60/40 portfolio. A $50,000 investment grows to $1.3 million over 20 years instead of $350k.
This new AI just took my entire investing strategy and turned it into the results that you can see on the screen right now. And as a pro trader, this would have probably taken me weeks of trial and error with a Bloomberg terminal that cost over $2,000 a month. And this AI did the whole thing for me in just 30 minutes whilst I was reading through the news. So now I'm going to show you what it is and how you can use it to get better returns with just a handful of ETFs. Now, most models were built during the 40 years that we saw falling interest rates. Stocks went up, bonds went up, and more often than usual, they both gained at the same time. But then 2022 happened, and inflation came back for the first time in 4 decades. Rates went up at breakneck speed, and stocks and bonds fell together for the first time in a generation. The 60/40 portfolio fell 20% in a single year, and every model built on that era broke. So now I want to show you how I've used AI to test mine and the breakthrough that made it adaptive, where every other model came unstuck. First of all, I want to focus on the drawdown. In 2008, we saw a significantly shallower drawdown compared to both the 60/40 portfolio in blue and then the S&P below that in that kind of gray-blue color. And the same thing was true going into the other big nasty sell-off that caught many people out in 2020. And at the top, just for reference, during these periods, you can see how the model is adaptive and how it changed. In the run-up to the peak, and similarly for 2020, how it protected us in the slowdown and then repositioned for the recovery. That's ultimately what contributed to this line rising, which is the strategy's equity curve, at a much greater rate than both buy and hold and the buy and hold of a 60/40 model. So that confirmed that the logic was sound, but I already knew that because I was managing money with it back then. And neither of these periods really saw any inflation or rate hikes, crucially. So then I asked it a harder question. What happens when I run it through 2022, which was the period that basically broke everything else? A 15.3% compound return with a Sharpe ratio of nearly 1.2, which is double the benchmark, and a maximum drawdown of just 12%. So it seemed that Claude had solved for the regime shift that caught the entire industry off guard. But would it break the performance that came before it? Because intuitively, For something to outperform in a contrasting environment, it probably means that it's going to underperform in the other. But when I saw the numbers, it confirmed that I'd built something truly adaptive here, of course with Claude's help. Because going back to 2007, through every crisis, through 2022, it increased the compound return to over 19%. The Sharpe ratio remained over 1.2, and maximum drawdown was only 15.7%. So that's over 1.5 times the return of the S&P with 1/3 of the risk as you define it in drawdown terms. But let's think about what that means for an investor in real terms. If you had $50K to invest at the market's return, that would grow to about $350K over 20 years. But the same $50K in this system would have compounded to over $1.3 million. Now, this of course is not financial advice, but let's say that you are getting a bit close to retirement and besides your golf handicap, you might be worried about two things here. Inflation eating into your savings and a big market sell-off, which could delay your retirement. But this model potentially solves those two things because in our backtest it returned double that of a standard 60/40 portfolio, which your advisor's probably otherwise putting you in, with 50% less drawdown, meaning that you don't need to sit in bonds for protection like everybody tells you. And in fact, bonds are probably going to remain the bigger risk going forward. Which might explain why the stock market's rallied to new highs despite surging energy prices and geopolitical unrest recently. It doesn't attempt to predict the future, it just adapts to it when things change, and that's what enables both the performance and the resilience that we've seen in the model. So I'm going to put a link below if you want to get access when I launch this in a few weeks. For those of you that sign up, there'll be a founding members discount if you're on the list. And once you've done that, then watch this video next, which YouTube thinks you're going to love. And personally, I think you should watch it too, because an algorithm just rebuilt my entire trading system for me and we're all going to be rich.
