Is the Capital Asset Pricing Model still relevant today or have most traders moved on to multi-factor models like Fama-French?

The Capital Asset Pricing Model, or CAPM, remains a foundational concept in finance for calculating expected returns based on an asset's systematic risk relative to the market. Developed in the 1960s, it uses the formula E(R_i) = R_f + β_i (E(R_m) - R_f) to estimate returns, where beta measures volatility against a benchmark. However, empirical studies have shown limitations, as CAPM often fails to explain anomalies like the value premium or small-cap outperformance. This has led many institutional investors to adopt multi-factor models such as Fama-French, which incorporate additional factors including size, value, and profitability to better capture real-world returns. These models provide a more nuanced view of risk and expected performance across diverse market regimes. At VixShield, we approach this through the lens of practical options income generation rather than pure academic asset pricing. Russell Clark's SPX Mastery methodology focuses on daily 1DTE SPX Iron Condors, where the emphasis is on theta decay, implied volatility dynamics, and defined-risk positioning instead of long-term beta-driven equity allocation. Our signals fire at 3:05 PM CST each market day, delivering Conservative, Balanced, or Aggressive tiers targeting credits of $0.70, $1.15, or $1.60 respectively. The Conservative tier has historically achieved approximately 90 percent win rates, or about 18 out of 20 trading days, by relying on the EDR Expected Daily Range indicator and RSAi Rapid Skew AI for precise strike selection. Rather than debating CAPM versus Fama-French for portfolio construction, we integrate the ALVH Adaptive Layered VIX Hedge, a proprietary three-layer system using short, medium, and long-dated VIX calls in a 4/4/2 ratio. This hedge cuts drawdowns by 35 to 40 percent during volatility spikes at an annual cost of only 1 to 2 percent of account value. The Unlimited Cash System combines Iron Condor Command execution with Covered Calendar Calls, Theta Time Shift recovery, and VIX Risk Scaling that adjusts tiers based on VIX levels, such as holding all trades when VIX exceeds 20. Position sizing is strictly capped at 10 percent of account balance per trade, aligning with stewardship principles that prioritize capital preservation over aggressive growth narratives. In the current market with VIX at 17.95 and SPX near 7138.80, contango conditions support premium selling while ALVH stands ready for protection. This Set and Forget approach avoids stop losses and active management, allowing theta to work through the Theta Time Shift mechanism that has recovered 88 percent of losses in backtests from 2015 to 2025. All trading involves substantial risk of loss and is not suitable for all investors. For deeper implementation details on these strategies, visit VixShield.com to explore the SPX Mastery resources and join the live refinement sessions.