By Dejan Ilijevski, MBA, MS — SCM Investment Services
Almost every day, a marketing email crosses my desk promising eye-popping investment returns. One last week pointed me to a firm whose published fact sheets advertised year-to-date model returns as high as +101.8% — in a year when the very indexes those models are measured against were up between +11% and +18%. Numbers like that don’t signal a better strategy. They signal a better sales machine.
Out of curiosity, I clicked through to the firm’s website and pulled up the detailed “Fact Sheet” behind one of the claims — a strategy called the “Core S&P 500 Growth Model,” advertised at a +93.4% year-to-date return against +11.3% for the S&P 500, both as of the sheet’s July 15, 2026 date (a simulated, backtested figure — more on what that means below). It was a useful reminder of how easily financial marketing can build an illusion of success on paper.
Building real wealth over time has less to do with chasing headlines and more to do with understanding how those headlines are manufactured. So let me pull back the curtain on the sleight of hand that’s common in financial salesmanship — and why transparency matters far more than a promotional number.
1. Hypothetical “paper” returns vs. real money
Promotional models almost always rest on hypothetical backtesting. A software program runs a strategy’s rules over past data and calculates what it would have returned under ideal historical conditions: no missed trades, no panic during a selloff, and zero price slippage. Every order fills, every time, at exactly the right moment.
That one fact sheet wasn’t an outlier. Here is the same comparison across the firm’s published models — in each case the advertised model return set against the benchmark printed on the very same sheet:
Note what that table is and isn’t. Both columns are the firm’s own numbers — I haven’t swapped in a benchmark of my choosing. Each gap is the distance between what the model claims and what the yardstick printed beside it actually did.
During my years in the trading industry (first as a trader, then leading discretionary trading operations), I learned the hard way that a backtest is one of the least reliable things you can lean on. When you are moving real money in live markets, you face real risk, real market impact, and real execution variability — none of which a simulation has to survive. Backtested results rarely translate cleanly into live results because the market has a way of charging you for the frictions the model got to ignore.
2. The illusion of an “official” ticker
Promotional sheets often carry a code that looks like a real, exchange-traded symbol. The fact sheet I pulled up listed P:4820193 next to the strategy name. To most investors, that reads like a mutual fund or ETF you could go buy.
It isn’t. The P: prefix is simply an internal tracking ID that research and analytics platforms generate when someone types a custom list of stocks into a simulator. It doesn’t trade on any exchange, there is no fund behind it, and no investor can actually buy it. It exists only inside the software.
3. “Brand borrowing” that hides extreme concentration
Marketing materials love a reassuring, familiar name. Call something an “S&P 500 Growth Model” and you’ve borrowed the credibility of a broad index — making a narrow bet sound like an entire market.
The holdings tell a different story. On this particular model’s fact sheet, the strategy was 100% concentrated in technology and held just six individual semiconductor and memory stocks — with nearly 30% sitting in a single name. Calling an aggressive six-stock chip bet an “S&P 500 Growth Model” uses a trusted brand to dress up extreme concentration risk. When one stock stumbles, a portfolio like that has nowhere to hide.
4. The fine print: gross of everything
Advertised returns are typically shown “gross of fees.” That means they leave out advisory fees, platform costs, trading commissions, slippage, and the capital-gains taxes that frequent trading tends to generate. Strip a headline number of all of those and it will look better than anything you could actually keep.
The disclosures say as much themselves, printed in bold uppercase text:
“THIS REPORT IS NOT AN INVESTMENT PERFORMANCE REPORT. DO NOT RELY ON THIS REPORT AS PORTRAYING, OR CONTAINING PERFORMANCE OF, AN ACTUAL ACCOUNT. THIS REPORT SHOWS HYPOTHETICAL OR SIMULATED RETURNS … AND IS FOR ILLUSTRATIVE PURPOSES ONLY.”
Read that twice. The same document that leads with a +93% return admits, in its own words, that the number never happened in a real account. The headline is for selling; the fine print is for the lawyers. This is the same pattern I’ve written about before — see A Floor Marketed as a Ceiling.
There is one more line worth noticing. The same fine print states that the firm behind these models is not a registered investment adviser — it sells research to licensed professionals. Material like this doesn’t arrive under the same advertising constraints that govern a registered firm, which is precisely why it can lead with a number like +93.4%.
Three questions that cut through the noise
Promotional materials are built to sell an idea, not to inform a decision. When any headline, chart, or strategy pitch lands in front of you, three questions will separate substance from theater:
- Is it real or simulated? — Ask whether returns reflect real money in actual accounts or a backtested computer model. If it’s a model, treat it as a hypothesis, not a track record.
- What’s actually under the hood? — Look past the name to examine sector concentration, individual holdings, and whether that ticker is buyable or just a software ID.
- What are the net numbers? — Demand to see what remains after all fees, trading costs, and taxes. Gross returns are marketing numbers; net returns are spending numbers.
Navigating real markets is about managing real risk, not chasing theoretical returns that only ever existed on paper. That’s the whole reason I built SCM the way I did: no commissions, no products to push, and no incentive to sell you massaged, simulated performance.
A note on the figures
The advertised model returns above, and the benchmark figures they are set against, are both taken from an anonymized third-party vendor’s own published strategy fact sheets, year-to-date as of July 15, 2026; the vendor and identifying codes have been withheld or altered. No outside benchmark data have been substituted — each comparison is the one the vendor printed on its own sheet. Figures are rounded. You cannot invest directly in an index, and index returns reflect no fees or expenses. References to specific securities or platforms are for illustration only and are not recommendations.
Sources: Anonymized third-party vendor marketing email and its linked published strategy fact sheets, year-to-date figures as of July 15, 2026 (vendor withheld); third-party analytics platform documentation on custom-security identifiers.
Investment advisory services offered through SCM Investment Services, a Registered Investment Adviser registered in the States of Minnesota and Indiana and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. This material is for informational and educational purposes only and is not intended as investment, legal, or tax advice. All investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Hypothetical or backtested performance has inherent limitations and does not represent the results of any actual account; different assumptions, dates, or costs would produce materially different results. Any examples are for illustrative purposes only and do not represent any actual investment, endorsement, or recommendation. Please consult a qualified professional before making investment decisions. For SCM Investment Services’ full firm disclosures, please see our disclaimer page. Form ADV Part 2A is available upon request and at scminvesting.com.
