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

The Logical-Invest newsletter for July 2019

Up, up and up The FED is at it again! With Fed’s June 19 statement, expectations for three rate cuts were set, one possibly coming as soon as this month. This made the markets rally again erasing any previous losses and propelling the S&P 500 back to it’s previous high. The index seems to have priced in the move, which leaves us at a somewhat uncomfortable position: The possibility of the markets actually doing well … Read more

Why we employ walk-forward testing to avoid curve-fitting

walk forward analysis backtesting

How we backtest our trading strategies, how we avoid overfitting by using walk-forward testing and why we adapt our strategies from time to time. One of the main questions we get is this: Why do we change  the set of parameters from time to time? Is this not just curve-fitting to improve the system performance? Some think, that once you developed a strategy, you should never change it. They argue this is the only way to … Read more

The Logical-Invest newsletter for June 2019

May 2019: Go-to-cash mechanism On last month’s newsletter we asked the question: Can the index (S&P 500) continue higher? The answer we gave is that we do not know so it best to follow rules and be protected. Last month our ‘go-to-cash’ mechanism kicked in. Most of our strategies allocated a large chunk to GSY, a short duration ETF which is almost equivalent to holding cash. This was somewhat counter-intuitive as the market reached new … Read more

The Logical-Invest newsletter for May 2019


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