Recovery priced-In At the start of the year, markets were driven higher because of the more dovish Fed (see our previous newsletters “Thank You Fed I & II“). This is now priced in. On top of that markets pushed higher on hopes of a US-China trade agreement. This has now been partially priced-in as well. We are now in a situation where the S&P500 has completely reversed last year’s correction and has a year-to-date performance … Read more
The Leveraged Universal Investment Strategy returns +13.3% for the month Free Enhanced Permanent Portfolio and BUG strategies return 3% and 2% Thank you FED (again) On March 20th the Federal Reserve announced that it will leave its benchmark rate unchanged at 2.25% to 2.50%, also indicating that no rate hikes would be likely this year. This is a substantial change in stance from December, when the Fed projected that as many as two rate hikes … Read more
We updated our QuantTrader software to version 515S. Read about changes to our strategies. If you are using QuantTrader, this time you need to manually update it, please download from here. Thank you FED These first two months of 2019 are a prime example of how sensitive markets have become to interest rate policy. Following the December move in the S&P 500 which painted a negative year for US Equities, Chairman Jerome Powell signaled … Read more
We have prepared a new version of QuantTrader which will be used to generate the Logical-Invest signals for the month of March. So please make sure you will use the new version from now on. If you are using the new version with your own strategies, you will need to re-optimize the strategies to get the same performance as with the old QuantTrader 514S version. When you do this you will probably to try out … Read more
Enhancing Harry Browne’s Permanent Portfolio The Permanent Portfolio is a simple, diversified portfolio You can construct it using 3 ETFs: SPY, TLT and GLD We enhance it by allowing variable allocations and monthly rebalancing We offer a free subscription so you can implement it in your own account including 401k or IRA What is the Permanent Portfolio by Harry Browne Harry Browne’s intention was to find a solution for the money “you need to take care … Read more
Our top 3 strategies this past month: Leveraged Universal Investment strategy with +7.5% return. Maximum Yield strategy at +4.3% U.S. Sector strategy (free to subscribe) at +3.1% News: Alex’s new post describes the process of blending Portfolios (rather than Strategies or ETFs) using the Portfolio Builder. Bouncing into 2019 Three fundamental trends to watch as 2019 unfolds: The first trend includes the reversal of QE in the U.S, the end of the asset purchase program of … Read more
We’ve received a couple of request in the last weeks whether it is possible to create a “Portfolio of Portfolios” in our Portfolio Builder. For example, to create a portfolio holding several of our Core Portfolios plus a custom portfolio in a fixed-weight or custom blend. Or to combine a one of the portfolios in the Portfolio Library with a single strategy or ETF. Cases for this include: You like two of our preset portfolios … Read more
Must reads: Frank Grossmann’s article “How to Hedge in Times of Market Trouble” (Seeking Alpha, LI Blog) 2019 strategy updates (LI Blog) Protecting your money After almost 10 years of a continuous bull market and 2 years of exceptional growth (2016-2017), 2018 was the first year that the SP500 turned negative. Apart from the dollar index, most asset classes also fell. To make things worse, the S&P500 dropped -20% from the September highs during what is … Read more
In this article I would like to explain how to create a hedge strategy for an equity position, so that draw-downs, like the current one (December 2018), are minimized. During this 10-year bull market, many investors have forgotten that investing only in equities can be quite risky. It has been simple to buy the SPY S&P 500 ETF and profit from rising valuations. This year-end 20% correction makes many investors reconsider safe haven assets like … Read more
Logical Invest Investment Outlook December 2018 The graph below is from a recent Bloomberg article entitled “A Brutal Global Market in 2018 Has Just One Champion“. That one champion, according to the article, was Treasury bills. It goes on to say: “By one simple measure, this is the worst cross-asset performance in more than a century“. Below you can see 89% of all assets had negative performances year-to-date (as of Nov. 22). This may be an exaggeration … Read more