The Coronavirus Market Crash – Lessons learned

coronavirus market crash 2020

Logical Invest in Bearish Mode Since January At the start of the year, before the CORVID-19 outbreak was known, we updated our strategies to better withstand a possible bear market or large correction. You can read the details here. A Two-Stage Correction In the first stage, hedges like gold and Treasuries worked well. Although the SP 500 took a free fall, the 30-year Treasury ETF went parabolic up as the 10-year yield touched 0.6%. Gold … Read more

The Logical-Invest newsletter for March 2020

How did LI strategies handle the correction Our strategies were hedged during this sudden market correction so they held up well. All strategies outperformed the S&P 500 which is down -9.8% for the month. As discussed in our “2020 investment strategy update” post, a correction with no warning was expected based on the experience from the end of 2018. The solution implemented was upping our algorithm’s allowed allocations to safe heavens as well as diversifying … Read more

The Logical-Invest newsletter for February 2020

Top strategies in January: The Leveraged Universal Investment strategy (3x UIS) up 6.1%. The Maximum Yield Strategy (MYRS) up 4.1%. The  Leverged Gold-Currency Strategy (GLD-USD) strategy up 3.3%. Our 2020 strategy outlook and strategy adjustments A reminder that starting January 1 2020, we have implementing several modifications to our strategies to make them less volatile. The biggest modification concerns the Hedge sub-strategy to ensure proper diversification between equities and multiple safe-haven assets. This worked out … Read more

The Logical-Invest newsletter for January 2020

All strategies positive for 2019 Logical Invest 2019 historical strategy performance based on actual signals issued.Last column is the correlation of each strategy to the S&P500. The Leveraged Universal Investment strategy (3x UIS) up 80%. The Maximum Yield Strategy (MYRS) up 54%. Our modified permanent portfolio (the “BUG”) up 11% with less than half the SP500 volatility. The Bond Rotation Strategy (BRS) up 6% with 1/3 the SP500 volatility. Most strategies had a correlation to … Read more

2020 Logical-Invest strategy update

Starting January 1 2020, we are implementing several modifications to our strategies to make them less volatile and more stable. The biggest modification concerns the Hedge strategy. As this sub-strategy is a major part of all of our ‘hedged’ strategies, any change in this sub-strategy automatically affects the strategies themselves. We are also implementing a new limit for allocations between hedge and equity. The equity/hedge allocations will now range from 40%-60%, which makes sure our … Read more

The Logical-Invest newsletter for December 2019

Did you notice a bear passing? There should be a widely available service to search past wall street media headlines, align them with a chart and see how well (or not) they predicted market moves. A few months ago, while the SP500 sat some 8% lower from today all headlines were reading about the yield curve inversion, tariffs and the coming recession. This ‘pessimism’ seems to be over. This month’s favourite headliner comes from Fidelity … Read more

The Logical-Invest newsletter for November 2019

SP 500 rockets all time highs

S&P 500 Powers To New Record For the third time in three months, the Federal Reserve lowered its key interest rate by a quarter percentage point, to a range of 1.5% to 1.75%. The main reason quoted was to help sustain U.S. growth despite a slowdown in other parts of the world. The FED did, however signal there would be no further reductions unless the economy takes a turn for the worse. Stocks advanced in … Read more

The Logical-Invest newsletter for October 2019

The retreat of the safe heavens September proved to be a mean reverting month for Treasuries and Gold. Following last month’s +11% and+8% moves respectively, Treasuries corrected by -2.6% while Gold retreated -3.3%. Although the S&P500 returned a healthy 1.95% and is flirting with all time highs, the market has become increasingly volatile and expectations for equities are mixed. The VIX index currently sits at 16 while longer dated VIX futures are closer to the … Read more

The Logical-Invest newsletter for September 2019

hedging drawdown market crash

Fear of a coming recession? And yet this is the perfect environment for a Logical Invest strategy. Our top performers for the month were the Leveraged Universal Investment Strategy (+19.9%) and the Maximum Yield strategy(+ 10.3%). Even our free Enhanced Permanent Portfolio returned 5% in August. Why? The answer is in the “safe-haven” assets: Bonds and Gold. Just this month, TLT is up by 11%, GLD by 8% while the SP500 lost -3%. Our strategies … Read more

The Logical-Invest newsletter for August 2019

QuantTrader users: Please update your software! See instructions at the end of this newsletter.* Paradigm Shifts Ray Dalio of Bridgwater and “All Weather” portfolio fame has published a very interesting article. Entitled ‘Paradigm Shifts”, he takes a long term outlook and makes a case for gold: “….I have observed there to be relatively long of periods (about 10 years) in which the markets and market relationships operate in a certain way (which I call “paradigms”) … Read more