I think I could probably make more money selling a tool or strategy that consistently, reliably makes ~2% more than government bonds than I could make off it myself, with my current capital.
You can't do it because there are lots of fraudulent operators in the space. Think about it: someone comes up to you offering a way to give you risk-free return. All your ponzi flags go up. It's a market for lemons. If you had this, the only way to make it is to raise money some other way then redirect it (illegal but you'll get away with it most likely), or to slowly work your way up the ranks proving yourself till you get to a PM and then have him work your strat for you.
The fact that you can't reveal how means you can't prove you're not Ponzi. If you reveal how, they don't need you.
It's been done again and again by funds. A new fund or fund company convinces someone with some name and reputation to come work for them and they become the name and reputation that gives some credibility and sells the new fund. Clients start by putting in just a little money and more later. Nobody knows the hard details outside of the new firm. Sometimes it goes nowhere and nobody hears of the thing again, sometimes it works out and they let nobody unaware.
> The fact that you can't reveal how means you can't prove you're not Ponzi. If you reveal how, they don't need you.
This is why I am wary of all those +10 minute YT vids telling you how you can't make significant amounts of money quickly or reliably in a short amount of time with very limited capital.
Seems like the money here would be building a shiny, public facing version of the tool behind a robust paywall and build a relationship with a few Broker Dealer firms who can make this product available to the Financial Advisors in their network.
If you were running this yourself with $1M input capital, that'd be $20k/year per 1M of input - so $20K is a nice number to try and beat selling a product that promulgates a strategy.
But you're going to run into the question from people using the product: "Yeah - but HOW DOES IT WORK??!!!" and once you tell them does your ability to get paid disappear? Do they simply re-package your strategy as their own and cease to pay you (and worse start charging for your work)? Is your strategy so complicated that the value of the tool itself doing the heavy lifting makes it sticky?
Getting people to put their money into some Black Box kind of strategy would probably be challenging - but Ive never tried it - it may be easier than giving away free beer for all I know. Sounds like a fun MVP effort really. Give it a try - who knows what might happen.
As fas as I know the more people use the strategy the worse it performs, the market is not static, it adapts. Other people react to the buy/sell of your strategy and try to exploit the new pattern.
The average return from index funds is the benchmark that all those others are trying to beat but all the competitors trying to beat the average have a tendency to push successful strategies towards the average.
That hypothetical person or organization already has an advisor in charge of their money at the smaller end or an entire private RIA on the Family Office side of things. This approach is a fools errand.
Well, see, I don't actually have a method for that. But if I did, I think my capital is low enough that I'd have more success selling it to other people than trying to exploit it myself, since the benefit would be pretty minimal if I did it with just my own savings, but could be pretty dramatic for, say, banks.
Strats tend to have limits. What works for you may fall apart with large amounts of capital. Don't discount compound interest. $10,000 compounding 30% over 20 years is 2 million without any additional capital.
