For context, I have been trading a 0dte automated quant system since January. Up around 18% YTD.
I used to run leveraged ETF based strategies before I discovered options.
I made some money from the bull run the last few years. But I really became disenchanted with the idea of holding SPY being a good investment.
* even with my rotational LETF Strategy, sharpe ratio barely gets above 1 out of sample. Compare that to the 8+ sharpe from my options strategy
* market valuations are absolutely insane
* all available evidence points to there being a bubble
* on a risk-adjusted basis, holding SPY is inferior even to a naive premium selling strategy
Obviously, most investors push the idea of diversification. But, the best investors have the philosophy:
"Put all your eggs in one basket, and watch the basket very, very carefully."
Diversification does well in cases of low investor competence or skill. But the most skilled investors are not fully diversified.
The real question is this:
Do you hold SPY because it's legitimately a good investment?
Or do you hold it because you are told to by the prevailing voices in the industry?
Or, like me, do you hold very little SPY at all?