With the S&P 500 Index ($SPX) hopping around like the Easter bunny, and 1,000-point moves in the Dow Jones Industrial Index ($DOWI) occurring seemingly daily, investors are looking for ways to reduce the excitement of investing for long-term goals.
Fortunately, 2025’s market drama, complete with tariffs, tech stock gyrations, and tumbling stock prices, has also ushered in a renewed desire for simplicity. Because the only thing that is worse than seeing your accounts losing digits off the end of their value is not being able to get back all the time spent accumulating “learning experiences” as markets keep taking more of your wealth.
When Bear Markets Attack, This Portfolio Fights Back
I’ve been writing about my Reward Opportunity And Risk (ROAR) Score here this year. That’s the indicator I developed as a longtime market technician, converting raw data from Barchart to answer a very basic question: “Will this stock or ETF rise 10% in price before it falls 10% in price?”
To me, that is where investment decision-making starts. Because if I buy something and it drops much more than that, I have to look in the mirror and realize I might have goofed. I developed ROAR to try to reduce the risk of that happening.
The ROAR Score Method: Not Just for Stock-Picking
But while it can be applied easily to any stock or ETF, ROAR’s humble beginnings a few years ago were as an easy-to-manage portfolio containing just two popular ETFs, the SPDR S&P 500 ETF Trust (SPY) and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL).
Those represent the “stock market” in its most commonly cited form, and the “risk free asset” according to Wall Street, the shortest-term U.S. Treasury Bills.
At the start of 2022, using some of my own money, I began to run a portfolio consisting only of those two ETFs. Once a week I would evaluate market conditions and decide whether to keep the mix of SPY and BIL intact, or adjust it by taking on more stock market risk (moving money from BIL to SPY) or “de-risking” temporarily by reducing SPY and increasing BIL. These are the only two choices I gave myself for that account. I wanted to see how competitive this “2-ETF ROAR Score” portfolio would be over time. I ran it with a conservative bent, since I’m all about risk-management as a priority. And I just followed the ROAR indicator.
ROAR 2-ETF Portfolio: How It Started, How It’s Going
As it turned out, the market was kind to this project. 2022 was the worst combined year for stocks and bonds in five decades. 2023 and 2024 were strong stock market years, but really for a narrow set of big tech stocks. And 2025? Well, you know. It hasn’t been pretty.
I can now look back over nearly 40 months and see how the ebbs and flows of both stock and bond markets have impacted this attempt to simplify part of my investing life. I can report that through Thursday’s close, this easy-to-run, low-cost portfolio that requires seconds a week to manage has outperformed.
Why This Strategy Outperforms
The ROAR portfolio has gained just over 12% since the start of 2022. If that doesn’t sound like a lot for a period of more than three years, consider the market environment. As I described above, the past few years has been one where both stocks and bonds had a pair of tough stretches, with a bull market in between. Sort of the financial market version of an Oreo cookie, where 2023 and 2024 were the creme filling in the middle.
Through Thursday, including dividends, the Invesco S&P 500 Equal Weight ETF (RSP) has gained less than 4%. Not annualized, total, over more than 39 months. The iShares Core 60/40 Balanced Allocation ETF (AOR), a classic stock and bond mix, was also up just 4%. And bonds, represented by the iShares Core US Aggregate Bond ETF (AGG) actually lost about 6%. So that 12% return looks a lot better in context. And, it reflects the idea that many traditional market approaches have not delivered in recent years.
Since ROAR is about pursuing gains (“reward”) while stemming major downside events like the one we’re in right now, what might be more notable than its return is its standard deviation. That’s a common investing risk measure that allows us to compare any two securities, and determine essentially how smooth the ride has been. At a standard deviation of 4.6% since the start of 2022, the ROAR portfolio compares favorably to AGG’s 7% risk level as well as the 11% and 16% measures recorded by AOR and RSP, respectively.
And, in relation to a 100% SPY portfolio, with full stock market risk, ROAR’s 12% return over that period is quickly gaining on SPY’s 17% gain. What seemed a remote chance earlier this year is now one more tough market day from occurring: Where ROAR’s risk-management mechanism could have outpaced the vaunted SPY ETF over a time frame long enough to be meaningful.
Less Risk, More Reward? It’s Not Only Possible, It’s Easy to Pursue.
The key concept here is not so much the trailing performance. That is in the past. However, the idea that there is a third option for investors, one that is neither “all in” nor “sitting in cash,” might help to be aware of as this year rolls on.
The risk management aspect of this might be best captured by how ROAR has done during what is currently the “peak to trough” segment of this market decline, from Feb. 19 through April 8. SPY fell 19% during those 7 weeks, just short of the traditional 20% bear market closing level. ROAR, spending most of that period at 10% SPY and 90% BIL, is down a mere 2%.
The implication of that for the next market recovery is key, especially if it turns out to be a lasting one. The way these markets are flying around each day, the ROAR investor might get back to even in a day, much less a coffee break. And with much of the stock-picking and other complex decisions stripped away from the process, they might not even need that coffee to focus on the matter at hand: How much is in SPY? How much is in BIL? And do my indicators prompt a change from the status quo?
