Describe the essence of the trading rule

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Your boss has asked you to evaluate a portfolio strategy that purports to capture all of the upside and none of the downside of the market. The key is a complex rule for buying and selling shares. You decide to simulate the strategy and discover that it lags the market on the upside and loses a small amount on average when the market declines. What's more, when you test the strategy with historical data it suffers sharp losses in a few volatile periods. How would you describe the essence of the trading rule to your boss? How would you explain your simulated results?

Reference no: EM132953137

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