Discussion of Results
This page is for informational purposes and is provided to potential workshop attendees for Snider Advisors. You should be aware that the results quoted are averages. Some investors do better than the average and some do below the average.
Historical Performance
The yields quoted by Snider Advisors are based on a group of accounts we have been able to track and verify, starting in September 2002, through December 2007. The average annualized yield for the entire sample was 14.3% after transaction costs.
Investors in accounts that can borrow on margin had annualized yields 4.7% higher than those in accounts without margin (such as IRA’s). The average for margin accounts was 16.6% and the average for non-margin accounts was 11.9%.
Smaller accounts had annualized yields about 1.3% lower than the retirement-sized accounts (over $250,000).
All terminated accounts are included up to the last completed month. The annualized yield for each month in each account is weighted equally in calculating the average.
Histogram - Gross
Histogram - Net
Calculation of Yields
The yield calculation is different than the return calculation typically shown by most in the investment industry. The percentage yield is the yield for the month divided by the Stake. The Stake is all contributions minus withdrawals, plus the profits from any closed positions. The yield is then multiplied by 12 to get an annualized rate. Note that some months are actually four weeks and some are five weeks, and the first month of an account can be shorter or longer. No adjustment is made for these differences, which are expected to be minor.
These yields are shown for illustrative purposes only. Results are not a guarantee of yields an investor would receive by investing using the Snider Investment Method®.
Monthly Yield - Gross
Monthly Yield - Net
Factors That Can Affect Yields
The yields quoted were obtained by using methods substantially similar to those taught in the Snider Method workshop. The yields of any one individual investor can be greater than or less than the average, and the average of future periods can be greater than or less than the average of past periods.
The Snider Method focuses on stocks that pass well-defined bankruptcy screening tests based on academic research. Within these stocks, the Snider Method selects those with a liquid option market and high option premiums.
The objective is to select stocks of companies with a low probability of bankruptcy but higher-than-average price volatility. Option premiums are higher when interest rates and the anticipated future volatility of stock prices are high. Both these factors have been low by historical standards over the time period measured, but they could be higher or lower in the future.
Possibility of Losses
Investors who terminate positions prematurely can experience realized losses, sometimes greater than the yield realized over the lifetime of the position. For this reason, investors should be able to leave the principal invested (or reinvested after a position closes) for a minimum of two years. Some positions may not close within two years.
Finally, the Snider Method does involve investment in stocks. If a company were to declare bankruptcy, there would be a permanent loss of the capital invested. There have been no bankruptcies in the period covered, but that does not mean the chances of bankruptcy are zero.
Disclaimers
Snider Advisors makes no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. All investments involve risk, including possible loss of principal. The yield calculation discussed herein includes reinvestment of option premiums, interest, dividends, and realized gains or losses from closed positions, but excludes unrealized gains or losses from open positions. Yield also reflects a deduction of brokerage commissions but does not reflect a deduction of any asset management fees paid to third-party managers (such fees may vary). Investors who manage their own accounts using the Snider Method will not incur these asset management fees. Some yield figures are based on estimates and are subject to change. The information contained herein is current as of the date hereof, but may become outdated or subsequently may change. Past performance is not indicative of future results.
