- Welcome to our new newsletter, “Milton Berg EDGE.” This publication is designed for everyday investors seeking clear and straightforward insights into the financial markets. Our goal is to provide investors with an investment strategy that can easily be implemented with widely available investment vehicles.
- We focus on two primary investment areas: • The S&P 500, accessed through popular exchange-traded funds (ETFs). • Short-term U.S. Treasury bills, accessed through treasury money market funds.
- While this newsletter is not intended and should not be construed as individualized investment advice, investors working with a brokerage account or financial advisor can apply our approach at their own discretion and risk.
- Our content is particularly relevant for investors with tax-deferred retirement accounts who aim to grow their savings over time. However, those persons investing outside retirement accounts may also benefit from our research and ideas.
Our Tracking Portfolio
- We maintain a real-time tracking portfolio that follows our published investment strategy. This portfolio began at the close of trading on May 30, 2025, with $9,997.76. As of January 7, 2026, its value stood at $11,804.61, representing a gain of 18.07% over the period. For comparison, the S&P 500 Index returned 17.07%, while the S&P 500 Total Return Index (Bloomberg Ticker: SPXT) gained 17.96% during the same time frame.
About the S&P 500
- The S&P 500 Index tracks roughly 500 of the largest publicly traded companies in the United States, representing about 80% of the total U.S. stock market’s value. It includes leading firms across sectors such as technology, health care, finance, and consumer goods. Larger companies like Apple, Microsoft, and Nvidia exert greater influence on the index than smaller ones.
- Although labeled “S&P 500,” the index may contain slightly more than 500 securities because some companies have multiple share classes. Importantly, the S&P 500 changes over time: only 53 of its original constituents from 1957 remain today. The index is overseen by a committee at S&P Global, which reviews its composition quarterly, making it an actively maintained list of major U.S. companies rather than a static collection.
Historical Perspective
- Since 1957, the S&P 500 has produced an average annual total return of about 10.9% (source: Ned Davis Research). Actual investor outcomes depend on timing. For example: • $10,000 invested in October 2007 grew to approximately $20,400 after ten years (7.4% annualized). • $10,000 invested in March 2009 grew to approximately $50,100 after ten years (17.6% annualized).(Source MB Advisors)
- However, downturns are part of long-term investing. Since 1957, the S&P 500 has experienced six declines exceeding -33% and sixteen declines of -19% or more.
Our Approach
- This newsletter aims to provide data-driven insights that encourage long-term participation in the S&P 500 while seeking to sidestep major bear market declines.
- To that end we have developed more than 1200 S&P 500 models dating back to 1957, designed to identify and pinpoint lasting market lows, usually within days of those final lows. Additionally some of these models generate buy signals during rising markets as well. When a buy indication occurs, our Model portfolio shifts to a 100% S&P 500 invested position.
- Market peaks are far more difficult to model. The timing for 100% investment in the S&P 500 is based on our extensive market modeling. The decision to sell the S&P 500 and invest the proceeeds in US treasury bills uses a trend following pattern-based model. The program shifts between a 100% investment in the S&P 500 and a 100% investment in short-term treasuries. We do not invest incrementally.
- As of January 7, 2026, the long-term investing model continues to maintain full exposure to the S&P 500, following a buy signal generated at the close of trading on April 4, 2025, after the index closed at 5,074.08. This signal came after a single-day drop of -5.97% and a cumulative decline of -17.41% from the February 19, 2025 peak. From April 4, 2025 to January 7, 2026 the S&P 500 gained +36.39% (source: Bloomberg)
- Clients will be updated on market conditions approximately twice monthly. Whenever there is a change in the allocation between S&P 500 equities and Treasuries, clients will receive prompt notification.
Historical Hypothetical Results (Please See Disclaimers)
- Since 1957, the Model would have made 54 trades between the S&P 500 and treasuries. The average S&P 500 holding period is 365 days during this period of backtested and hypothetical Model performance, with an average round trip lasting 15 months. The longest holding period in the S&P 500 lasted three years and seven months. Losses in individual trades have, on average, been modest; gains have typically been notable. Since 1957, the Model would have generated a compound annual return of +18.5%, compared to +10.9% for the total return index over the subject time period (source: Ned Davis Research). Of 54 long trades occurring during the hypothetical performance period, 90.9% were profitable. The average gain was 23.26%, with the largest loss from buy to sell at -3.12% and the maximum portfolio drawdown at -18.23%.
- Measured from buy to sell, the program has generated moderate losses and strong gains. The average loss per losing trade over the hypothetical performance period was -1.42%; the largest occurred from August 30 to October 7, 1966, at -3.12%. The average gain per winning long trade was +25.77%, with the deepest drawdown being -18.23%.