Calculated Risk 250 Overview
| CAGR | 34.3% |
|---|---|
| Maximum drawdown | -23.6% |
| MAR ratio | 1.45 |
| History | 23 years (281 months) |
Calculated Risk 250 is the top tier of the Calculated Risk family and the most aggressive portfolio on this site. It holds Catalyst 300 at 70% and Triad 135 at 30%, and rebalances back to those weights each January.
Every part of this portfolio can lever. Catalyst 300 reaches 3x, and Triad 135 levers one of its three sleeves to 2x. Unlevered Triad, which is half the portfolio at the entry tier, does not appear here at all. Maximum notional is about 250%.
This tier is for investors who want leverage and understand what that means in a bad year. It is not a more efficient version of the lower tiers. It is a larger bet with a correspondingly larger worst case.
What the Name Means
The number is arithmetic, rounded.
| Component | Weight | Maximum notional | Contribution |
|---|---|---|---|
| Catalyst 300 | 70% | 300% | 210% |
| Triad 135 | 30% | 135% | 40.5% |
| Total | 100% | 250.5% |
The exact ceiling is 250.5%, and the name rounds it to 250. It is the notional maximum at target weights, reached only when both leverage modules are deployed at once. Average leverage has run around 134%, with at least one module deployed in roughly 42% of months. Because weights drift between January resets, a strong run for Catalyst 300 can carry actual exposure somewhat above the ceiling until the next reset; the highest on record is 272%, in September 2020.
Catalyst 300 reaches 3x through TQQQ. Triad 135 levers only its U.S. large-cap sleeve, to 2x through SSO, which is why the whole strategy tops out at 135% rather than 200%.
How the Leverage Works
Smart Leverage is a single mechanism, used by every leveraged strategy on this site. It sits dormant by default and arms only after the broad U.S. equity market has fallen at least 10% from its high. From armed, it deploys when the market's own momentum turns back up.
Leverage therefore arrives after a decline rather than at a high, when more of the fall has already happened. One drawdown event produces one deployment: after leverage comes off, a fresh 10% decline is required before it can arm again.
Each block runs its own copy of that mechanism. Catalyst 300 watches the Nasdaq 100, and Triad 135 watches its U.S. large-cap sleeve. In a broad sell-off both usually arm and deploy, but they are separate switches and do not have to move together. The portfolio is unlevered most of the time, and during the windows when Smart Leverage is live it carries serious exposure. That is the correct mental picture of this tier: long stretches at 1x punctuated by periods of heavy leverage.
At this level, leverage is the dominant risk. A conditional rule is not a safety net, and three times exposure on 70% of a portfolio is a large position by any standard. Smart Leverage has a strong record, and a record is not a promise. Size this tier as though a deployment could go wrong, because eventually one will.
Why These Two Blocks
Catalyst 300 at 70%
The dominant block and the main engine. Catalyst compounds faster than anything else available to this family, and the 3x variant compounds faster still.
Worth stating plainly: the 3x variant does not inherit the drawdown behavior of the 2x one. At the lower tiers, Catalyst 200 has historically matched unleveraged Catalyst's worst decline, because Smart Leverage was not deployed during that episode. Catalyst 300 has not matched it. The extra leverage shows up in the decline as well as in the return.
At 70% of the capital and more than four fifths of the leverage ceiling, this is a concentrated bet on Catalyst's read of the macro regime, and it should be understood as one.
Triad 135 at 30%
Triad is the stabilizer in every member of this family, and here it is a lightly leveraged version. Triad 135 keeps all three of Triad's independent momentum sleeves and their defenses; only its U.S. large-cap sleeve levers, to 2x, when Smart Leverage deploys.
That gives the portfolio a second engine reading a completely different input from Catalyst, relative momentum within its own sleeves rather than a macro regime. With Catalyst 300 carrying more of the weight, the stabilizer's job is to stabilize, so it adds only a modest amount of leverage of its own rather than competing with the main engine for the leverage budget.
No unlevered ballast
Every other tier in this family holds base Triad as a block that never levers: half the portfolio at Calculated Risk 150 and 35% at Calculated Risk 185. This tier has none. Triad 135 comes closest, levering one sleeve and only to 2x, but it is still a leveraged block. Everything this tier gains over the others comes from that choice and from the heavy weight in a 3x block.
No passive sleeve
The crisis protection in these portfolios comes from the active blocks going defensive, not from a hedge sleeve. This blend takes that protection directly from Catalyst and Triad rather than paying for a basket of diversifiers to deliver it.
Rebalancing
Calculated Risk 250 resets to 70/30 in January, and only in January. Between resets the weights drift with each block's returns, so a strong year for Catalyst 300 leaves it above 70% until the following January.
Drift matters more at this tier than at the others. A block that can triple its exposure during a deployment window can also grow its share of the portfolio quickly, and it stays grown until January.
The Mix Can Change
Calculated Risk 250 is a portfolio of DMS strategies, and the DMS lineup is not frozen. New strategies are added and existing ones are refined over time, and when a new or updated strategy would make for a better risk-adjusted portfolio, the strategies and weights used here may change. Changes take effect at the start of a new month, never partway through one.
When the mix changes, the history shown on this page is recalculated as if the current mix had been held throughout. The record describes today's portfolio, not the path an investor following it would actually have taken, which is one more reason to read it as a backtest rather than a track record.
Why the Record Starts in 2003
Catalyst's regime classification depends on market-implied inflation expectations, and that data series begins in 2003. Since Catalyst 300 is the largest component here, the portfolio's history begins there too.
Triad 135 has a much longer record on its own page. Comparisons with strategies whose histories reach back to 1980 are comparing different eras as well as different designs, so the tables below hold every row to the same window.
Performance Highlights
Over the full available history, alongside its own components:
May 2003 through September 2026, net of trading friction:
| CAGR | Max Drawdown | Ulcer Index | UPI | |
|---|---|---|---|---|
| Calculated Risk 250 | +34.3% | -23.6% | 4.46 | 7.32 |
| Catalyst 300 | +40.9% | -27.2% | 5.65 | 6.96 |
| Triad 135 | +17.1% | -10.8% | 2.86 | 5.41 |
| S&P 500 | +11.3% | -51.0% | 11.72 | 0.82 |
The Ulcer Index measures how deep the portfolio went and how long it stayed there, so lower is better. The last column is the Ulcer Performance Index: return above cash divided by the Ulcer Index. Max Drawdown reports the worst single moment; UPI reports the experience of holding it. Higher is better.
Read the top row against the two below it. The blend scores higher on UPI than either component, and its worst decline is nearly four points shallower than Catalyst 300's. Catalyst 300 compounds faster on its own; Triad 135 is calmer and earns far less. Two engines failing at different times is a more survivable way to carry this much exposure than one engine carrying all of it.
Against the index, this tier earns nearly three times the annual return with a worst decline under half the index's. That comparison is real, and it should not be mistaken for safety. A 20% decline on a levered portfolio is a different experience from a 20% decline on an unlevered one, because the leverage invites you to size the position larger in the first place.
The family ladder
The same window, showing where this tier sits among its siblings:
May 2003 through September 2026, net of trading friction:
| CAGR | Max Drawdown | Ulcer Index | UPI | |
|---|---|---|---|---|
| Quiet Compounding | +16.2% | -7.2% | 2.12 | 6.89 |
| Calculated Risk 150 | +24.5% | -12.7% | 3.11 | 7.34 |
| Calculated Risk 185 | +28.8% | -17.2% | 3.71 | 7.34 |
| Calculated Risk 250 | +34.3% | -23.6% | 4.46 | 7.32 |
| S&P 500 | +11.3% | -51.0% | 11.72 | 0.82 |
Return climbs steadily up the ladder, drawdown climbs with it, and the risk-adjusted column barely moves: the three leveraged tiers land between 7.32 and 7.34. CR 150 and CR 185 are level on that measure, and CR 250 is only a couple of hundredths behind.
Moving up the ladder buys more return in exchange for more pain at roughly a constant exchange rate, and the right tier is the one whose worst decline you would actually hold through. For this one, that means being able to sit through a decline north of 20% on a levered portfolio without selling, and accepting that the worst decline ahead may be larger than the worst one behind.
Two cautions apply here with more force than anywhere else on this site. These records are backtested, and a heavily levered portfolio assembled from components chosen after their histories were known deserves real skepticism. And a single figure covering two decades says nothing about the order the returns arrived in, which is most of what an investor lives through. With 3x sleeves, order is everything.
Portfolio Characteristics
- The most aggressive portfolio here. Maximum notional of about 250% (250.5% exactly) at target weights, reached when both leverage modules are deployed. Average notional has run around 134%.
- Leverage in both blocks. Catalyst 300 levers to 3x through TQQQ; Triad 135 levers its U.S. large-cap sleeve to 2x through SSO.
- No unlevered block. The only tier in this family without base Triad.
- Conditional, not constant. Leverage deploys after a market decline rather than being carried permanently.
- Deeper declines than the lower tiers. The historical worst is well beyond the entry tier's, and the future worst could be larger still.
- Two independent engines. Macro regime positioning and rotational momentum, each reading different inputs.
- Annual rebalancing at the top level. Weights reset each January and drift in between, and drift runs further here than in the lower tiers.
- Substantial underlying turnover. The portfolio trades rarely; its components do not.
- Best suited to tax-deferred accounts. Component-level turnover generates short-term gains. In a taxable account, plan accordingly.
- Shorter history than most strategies here. The record begins in 2003 because of Catalyst's data dependency.
- Fully mechanical. Every allocation and every leverage decision follows from published rules with no discretionary override.
Who It's For
Calculated Risk 250 is designed for investors who want:
- The highest returns available here, and who have decided what that costs.
- Serious leverage applied after declines rather than carried at all times.
- Two independent engines rather than a single leveraged strategy carrying everything.
- A clear ceiling on total exposure, stated as arithmetic rather than described in adjectives.
- The tolerance to sit through a decline above 20% on a levered portfolio.
It is a poor fit for most investors, and that is not a disclaimer. Anyone who would sell during a decline deeper than the historical worst, who is investing money they will need within a few years, or who has not held a levered position through a bad market before should start lower. Calculated Risk 185 gives up a few points of return for a meaningfully shallower ride, Calculated Risk 150 keeps half the portfolio unlevered, and Quiet Compounding uses the same portfolio-of-strategies approach with no leverage anywhere.
A general caution about this family, and about this tier especially: leverage magnifies whatever happens next, including the parts nobody modeled. Size the position accordingly.
Past performance, including backtested results, is not indicative of future results. Backtested performance is hypothetical, does not reflect actual trading, and benefits from hindsight in the selection of strategy rules and component weights. Portions of the history rely on reconstructed proxy data for funds that did not exist for the full period. Leveraged exchange-traded funds, particularly 3x funds, carry risks well beyond those of their unleveraged counterparts, including path dependency and the effects of daily rebalancing. Investors should carefully consider their risk tolerance and consult with a financial advisor.
For the latest details, visit www.DualMomentumSystems.com