White Knuckle (Carter)
Core (50%): inverse-vol weight SPXL, TQQQ, TMF using 20-day volatility. Backtest max drawdown: -49.1%.
Strategy & methodology
Core (50%): inverse-vol weight SPXL, TQQQ, TMF using 20-day volatility; Rotation (50%): best 3-month return from EUO, IVOL, UUP, USDU, YCS, SPXL, TQQQ, TMF.
- Strategy type:
- Tactical asset allocation
- Rebalance frequency:
- Monthly
- Original publication:
- 2021; results after that are out-of-sample for the original research. All results are backtest simulations.
- Data through:
- Backtest data through 2026-10-22.
Research data and disclosures
Core (50%): inverse-vol weight SPXL, TQQQ, TMF using 20-day volatility. Backtest max drawdown: -49.1%. This is a tactical asset allocation strategy. BestFolio supplies the public rule or approach and backtest context; current signals, allocations, and paid interactive data remain restricted to Pro access. Users review the published signal and place any resulting trades in their own brokerage. Displayed returns remain hypothetical and do not represent a customer's brokerage record. The facts above show how current the data is.
- BestFolio supplies
- The monthly signal email and this strategy page; current signals and email alerts require Pro access.
- Customer action
- Review the published signal and place any required trades in your own brokerage. BestFolio does not execute orders.
- Costs and exclusions
- Backtests are net of a modeled one-way transaction cost (10 bps, scaled up to 3x under stress); taxes, fund-expense drift, or market impact are not modeled. No tax, no slippage beyond the stated cost. Methodology limitations
Published result: Engine drift-until-flip-v1, data version 9e02e943, published 2026-10-17
Is White Knuckle (Carter) still working in 2026?
White Knuckle (Carter) returned -2.13% over the trailing 12 months and 35.95% over 36 months through 2026-10-22, compared with a full-backtest annualized return of 12.09%. Its full-backtest maximum drawdown was -49.06%. The full sample contains 1776 daily NAV observations from 2019-09-30. These are model results, not investor account returns or a promise. As of 2026-10-22 it is -17.72% below its high-water mark of 2026-06-02, 5 months ago, and its longest run below a previous high was 2.6 years. Recent returns do not establish that the strategy will keep working.
| Period | Return | CAGR | Max drawdown | Observations | Dates |
|---|---|---|---|---|---|
| Trailing 12 months | -2.13% | Not annualized | -25.42% | 252 | 2025-10-22 to 2026-10-22 |
| Trailing 36 months | 35.95% | Not annualized | -40.85% | 754 | 2023-10-20 to 2026-10-22 |
| Full backtest | 123.83% | 12.09% | -49.06% | 1776 | 2019-09-30 to 2026-10-22 |
Last verified
Common questions about these results
Are these live investor returns?
No. These are the latest model NAV results from the published backtest. A recent date alone does not make a result an independently observed live record. Investor costs, taxes and execution can differ.
Why can a strategy lag for a year?
A tactical model can hold defensive assets during a rally or change positions during reversals. A short window can differ substantially from its full history. Compare cumulative returns over matching dates and inspect drawdowns as well.
How long has it spent below a previous high?
Its last high-water mark was 2026-06-02, 5 months before 2026-10-22, and it is -17.72% below that level now. The longest run below a previous high in the full backtest was 2.6 years. Recovering from a drawdown can take years, and a strong trailing return does not mean a past high has been regained.
Where can I check the signals behind these results?
The Signals tab on this page lists each dated model decision for the selected variant; for Pro strategies they are visible to Pro members. The methodology page explains the backtest assumptions.
White Knuckle (Carter) at a glance
White Knuckle (Carter) is a tactical asset allocation (TAA) strategy by David Alan Carter across Leveraged US Equity, Leveraged Nasdaq, Leveraged Long Treasuries, Currency Hedges, rebalanced monthly. Backtested 2019-09-30 to 2026-10-22 (7.0 years): 11.9% CAGR, 0.43 Sharpe, -49.1% max drawdown, 38.7% volatility.
- Type
- Tactical (TAA)
- Author
- David Alan Carter
- Rebalancing
- Monthly
- Risk
- Moderate
- Period
- 2019-09-30 to 2026-10-22
- CAGR
- 11.9%
- Sharpe
- 0.43
- Max Drawdown
- -49.1%
- Volatility
- 38.7%
White Knuckle (Carter) — Tactical Asset Allocation Strategy
Carter's White Knuckle strategy splits 50/50: a core sleeve (inverse-vol weighted among SPXL, TQQQ, TMF) and a rotation sleeve (best 3-month return from 8 candidates including hedge assets like EUO, IVOL, UUP).
White Knuckle (Carter): frequently asked questions
- What is White Knuckle (Carter)?
- Leveraged dual-engine portfolio: 50% inverse-volatility risk parity across 3x ETFs (SPXL/TQQQ/TMF) plus 50% momentum rotation among 8 hedge candidates. High-conviction leveraged approach. Monthly rebalancing.
- Who created the White Knuckle (Carter) strategy?
- White Knuckle (Carter) was developed by David Alan Carter. It is based on Carter, D.A. White Knuckle.
- What is the historical return and maximum drawdown of White Knuckle (Carter)?
- Backtested from 2019-09-30 to 2026-10-22, White Knuckle (Carter) returned 11.9% CAGR with a -49.1% maximum drawdown and a Sharpe ratio of 0.43. Past performance does not guarantee future results.
- How often is White Knuckle (Carter) rebalanced?
- White Knuckle (Carter) is rebalanced monthly. BestFolio publishes the updated allocation signal each period.
- Is White Knuckle (Carter) a tactical asset allocation strategy?
- Yes. White Knuckle (Carter) is a tactical asset allocation (TAA) strategy: it adjusts its holdings based on market signals each period rather than holding a fixed allocation.
Backtest Performance (2019-09-30 to 2026-10-22)
| Metric | White Knuckle (Carter) |
|---|---|
| CAGR | 11.9% |
| Max Drawdown | -49.1% |
| Sharpe | 0.43 |
| Sortino | 0.66 |
| Volatility | 38.7% |
| Calmar | 0.24 |
| Total Return | 121.5% |
| Backtest Period | 7.0 years |
Every rebalance fills at the signal-day close, net of modeled transaction costs. Followers trade at the next open; the delayed-close line in the Rebalance Frequency Sensitivity card shows the effect of trading one session later. Execution assumption
Strategy Details
- Type
- Tactical (TAA)
- Rebalancing
- monthly
- Risk Level
- moderate
- Variants
- 1
- Author
- David Alan Carter
- Source
- Carter, D.A. White Knuckle
Asset Classes
- Leveraged US Equity
- Leveraged Nasdaq
- Leveraged Long Treasuries
- Currency Hedges
- Volatility
Categories
Further reading
New to this approach? Read what tactical asset allocation is and how it works.
Holding White Knuckle (Carter) alongside another strategy? Use the free portfolio overlap calculator to see how much of the two portfolios actually differs.
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