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The Logical-Invest monthly newsletter for May 2017

Logical Invest Investment Outlook May 2017 Our top 2017 investment strategies, year-to-date: The Maximum Yield strategy with 25.75% return. The  NASDAQ 100 strategy with 18.26% return.   The Leveraged Universal strategy with 16.86% return. SPY, the S&P500 ETF, returned 6.97%. News: Our new U.S. Sector Rotation strategy is live (and for a limited time, free!). Unlike what you may have seen before, this strategy consists of 5 sub-strategies tracking sector momentum, mean reversion and relative under-performance to create a variable-beta play on the U.S. market. And yet it is very simple to implement. Give it a try. Thank you for your support of our QUANTtrader forum were you can share and discuss your own custom strategies.   Market comment: As we are heading into early summer, most assets classes are performing well partly due to a weakening U.S. dollar. Domestic equity continues to reach new highs, foreign and emerging equity markets are up while junk bonds and foreign bonds have now recovered from past corrections. Commodity performance is mixed but commodities do present a longer term opportunity for portfolio unclusion, as inflation resistant assets. Treasuries remain flat. The story in the media is that we are entering a more mature business cycle in the U.S. while foreign markets (China, India, Brazil and partly Europe) are also in growth and recovery mode. The sentiment is positive, at least as far as the major management companies go while individual investors are cautious, expecting a possible U.S. equity correction. The year long expectation of higher volatility due to tighter policy still is discussed but we have not seen this in the actual market. Far from it, we are seeing extremely low volatility levels compared to historical norms as well as perceived political risk in the U.S. and Europe. Our strategies performed as expected. Maximum Yield strategy added another 3.42% in April, keeping it in our top spot at +25.75 for the [...]

2017-04-29T14:57:16+00:00 By |1 Comment

The Logical-Invest monthly newsletter for April 2017

Logical Invest Investment Outlook April 2017 Our top 2017 investment strategies, year-to-date: The Maximum Yield strategy with 21.58% return. The  NASDAQ 100 strategy with 15.00% return.   The Leveraged Universal strategy with 13.02% return. SPY, the S&P500 ETF, returned 5.92%. News: Try our QUANTtrader software with our 30-day free trial. There is no better way to understand how our strategies work. Join our new QUANTtrader forum were users dare adjust the strategies and share new ones! Check our new European section.  Our in-depth 2-hour QUANTtrader webinar, with Frank Grossmann. Get a behind-the-scenes look at our strategies. We updated our web-site home page and menu.   Market comment: For the second time in three months, the Federal Reserve increased its benchmark interest rate a quarter point taking the overnight funds rate to a target range of 0.75 percent to 1 percent. Treasuries had small comeback since then signalling that the market had already priced in the Fed move and was bracing for a much more hawkish tone. Treasuries are once again negatively correlated to the equity market which is a positive for our strategies. The market is expecting two more hikes, in June and December. Volatility continues to be extremely at low levels, sending the ZIV etf (medium term inverse VIX etf) and our Maximum Yield strategy to new highs. Just like last month, what is interesting is the unnaturally low expectation of future volatility, with 8-month out VIX futures being below the 17 price level. Last month's VIX Futures term structure:   VIX term structure February 28th 2017 This month's VIX Futures term structure:   VIX term Structure March 31st 2017 This continuing "flattening" of the curve is unusual. In plain terms, future expected volatility levels seem to be low even though we are looking at upcoming French elections, Brexit negotiations as well as U.S. policy uncertainties. Investors seem fearless as the U.S. market is still at the top of the price chart. Investors may want [...]

2017-04-20T11:02:20+00:00 By |0 Comments

The Logical-Invest monthly newsletter for March 2017

Logical Invest Investment Outlook March 2017 Our top 2017 strategies, year-to-date: The Maximum Yield strategy with 14.90% return.  The Leveraged Universal strategy with 13.97% return. The  NASDAQ 100 strategy with 11.28% return.  SPY, the S&P500 ETF, returned 5.79%. News:  Our in-depth  2-hour QUANTtrader webinar, with Frank Grossmann. Get a behind-the-scenes look at our strategies. We are testing a new U.S. Sector-based strategy that should be available in the coming months.   Market comment: The S&P 500 is reaching new all time highs, currently at +10% from it's previous support in the summer of 2016. It is following a straight line with no major corrections since the U.S. elections. This type of movement makes investors nervous about a coming correction. Interestingly, looking at the VIX term-structure we see the following picture: VIX term structure February 28th 2017 This is highly unusual. Having near-month VIX contracts at very low prices is normal as the SP500 is breaking upwards. What is interesting is that far-out contracts are at extremely low levels as well, making the curve somewhat flatter than normal. This implies that market participants expect low levels of volatility in the future, even 9 months out. We will see how this plays out in the coming months. Our top 3 strategies are all U.S. market based and have achieved returns above 10% in just 2 months. Our Maximum Yield strategy, has returned an additional 4.1% in February, bringing year-to-date returns to 15%. Our 3x UIS strategy added 9% due to equity performance as well as a small upward reaction from oversold Treasuries. Our Nasdaq 100 added just 1.2% for the month. Of note is that the Nasdaq strategy has the lowest 60-day correlation to SPY, just 0.36, second only to our Gold-USD strategy's 0.18. Apart from our high flying strategies, it is worth mentioning and tracking our more defensive ones. Our Universal Investment Strategy [...]

2017-03-21T01:22:43+00:00 By |0 Comments

The Logical-Invest monthly newsletter for February 2017 – Topic 401k Strategies

Our special topic this month are 401k Strategies Logical Invest Investment Outlook February 2017 Our top 2017 strategies: The Maximum Yield strategy with 10.29% return. The  NASDAQ 100 strategy with 9.88% return.   The Leveraged Universal strategy with 3.96% return. SPY, the S&P500 ETF, returned 1.79%. Market comment: 2017 started up as a different type of year. Not just in politics. Despite the unprecedented political uncertainty, volatility in the SP500 dived this month causing our volatility harvesting strategy, Maximum Yield, to return more than 10% in just one month. Our Nasdaq 100 strategy returned 9.88%.  All other strategies were positive for January but with smaller gains of 1-3%. The only negative strategy for the month was the Gold-USD strategy at -2.06%. We would like to take this opportunity to thank two of our longer-term subscribers for their feedback, comments and support: Deshan, comment posted January 29, 2017: "Looking back at these comments from many months ago gave me a chuckle. Looked like the world was gonna end and the LI strategies were going down too. I feel badly for those that gave up. I stayed the course and am very happy customer." Read more.... Richard, author at Richard's Corner. "The universe of options for a conservative retiree who would like both some performance as well as low risk in a simple, stand-alone investment has proven difficult to find...". Read more...   We wish you a healthy and prosperous 2017 and good performance in your 401k Strategies Investment.  Logical Invest, February 1, 2017   Strategy performance overview: Logical Invest Performance January 2017 Visit our site for daily updated performance tables. Special topic 401k Strategies Do you know that our Backtest Software QuantTrader allows you to build your custom 401k Strategy in only a couple of minutes? Mix your plan sponsor assets into custom Strategies, see our recent High Performance Strategies webinar. Contact us to learn more. [...]

2017-03-13T19:03:21+00:00 By |1 Comment

Logical-Invest monthly update January 2017 – Topic 401k Investments

Special topic this month: 401k Investments Logical Invest Investment Outlook January 2017 Our top 2016 strategies: The Maximum Yield strategy with 29.92% return. The Leveraged Universal strategy with 22.33% return.   The NASDAQ 100 strategy with 21.54% return. SPY, the S&P500 ETF, returned 12.00%. Market comment: To put 2016 in perspective, we must go back to 2015 and remind ourselves how the rising dollar environment affected diversified investors. Most asset classes suffered through 2015. The S&P 500 stayed flat, long term Treasuries lost 2%, gold lost 9%, emerging markets shed 17% and USO, the crude oil ETF was down 44%. To make things worse, in August 2015 there was a sharp correction in equities which caused many "weak hands" to just exit the market. The first half of 2016, by contrast, rewarded anyone holding any of these assets.The second half proved far more challenging as rising yields expectations depressed bond prices, with TLT loosing 16% from July to December. Expecting higher yields in the U.S. can cause an appreciation in the U.S. dollar which in turn causes weakness in dollar denominated assets like gold and foreign equity. All of these assets gave back some of the early 2016 gains. Two major events, the Brexit vote and U.S. elections proved to be much less disruptive than expected. For 2016, The S&P 500 returned 12%, long term Treasuries gave up early gains to stay flat and gold gained 6%. Emerging markets gained a respectable 14%. All our strategies were positive for the year. Our 'non-equity' strategies did well outperforming their respective benchmarks:  Our volatility harvesting strategy (MYRS) returned 29.92%. Our Bond rotation strategy (BRS) returned 13.62%, compared to 1% for TLT and 2.4% for AGG. Our Gold hedged strategy (Gold-USD) returned 15.74% compared to 6% for Gold. For 2017, in preparation for rising yields, we have adapted our strategies to rely less on the 30-year Treasury ETF (TLT). We introduced inflation [...]

2017-03-13T19:00:47+00:00 By |1 Comment

The Logical-Invest monthly newsletter for December 2016

Special Topic: IRA investment using QuantTrader Logical Invest Investment Outlook December 2016 Our top year-to-date strategies: The Maximum Yield strategy with 30.27% return. The Leveraged Universal strategy with 17.73% return.   The NASDAQ 100 strategy with 15.19% return. SPY, the S&P500 ETF, returned 9.77%, year-to-date. NEWS: Enhancement of the Treasury hedge in our strategies (link).   Market comment: Presidents change, markets change and so do we. As our subscribers know well, Treasuries have been a cornerstone of our strategies. For the last few months many investors remained sceptical as 0% interest rates meant there was only one way for rates to go: Up. Although the logic has merit, markets often defy common sense and with the help of central banks the unthinkable became a reality: negative interest rates. Adding Treasuries to one's portfolio proved to be an excellent strategy, post 2009. We still believe the 30-year Treasury etf  (TLT) is an excellent diversifier for our strategies but recent developments convinced us that alternative hedging instruments are worth pursuing. For that reason we are changing our methodology to allow the use of inflation protected treasuries (TIPS) as well as well as our Bond Rotation strategy itself (BRS), as hedges to our equity portfolios. As an example, our Universal Investment strategy will allocate a percentage of assets to SPY and the rest to either TLT or TIP based on TLT vs TIP rules-based evaluation. Strategies like the Global Market Rotation will hedge their equity part with the BRS strategy as a whole. You can find a more detailed explanation of the new methodology in this article. This month was a difficult one for many of our strategies because of the simultaneous drop in treasuries, gold and non-U.S. equity markets as the US$ surged about 4.5% compared to major foreign currencies.  GMRS lost 8% this month alone, followed by the BUG (leveraged version) at -6% due to the TLT and GLD [...]

2017-03-14T22:11:10+00:00 By |0 Comments

The Logical-Invest monthly newsletter for November 2016

Special Topic: IRA Investments using QuantTrader, our Backtest Software Logical Invest Investment Outlook November 2016 Our top year-to-date strategies: The Maximum Yield strategy with 32.61% return. The Leveraged Universal strategy with 21.42% return.   The World Top 4 with 17.66% return. SPY, the S&P500 ETF, returned 5.87%, year-to-date. Market comment: Recent surveys show that fund managers have increased cash positions1 while outflows from equity funds are at historically high levels2. From a contrarian point of view this could be considered market positive. There are two bullish seasonal biases kicking in: The presidential year is nearing an end and we are walking into the traditional strongest months of the year. The beginning of the month may be volatile as markets react to elction results. It remains to be seen how and if these results will affect the rest of the year. All our strategies corrected during October. Our hedged Gold strategy was almost flat at +0.17% while our aggressive 3x UIS suffered a -11.02% correction. The World Top 4 lost -1.80% while most other strategies lost anywhere from -2 to -4%. This was partly due to a sudden correction in Treasuries, causing  TLT to lose almost 5% for the month.  SPY was down -1.73% and GLD -2.74%. This type of rise in cross-asset correlation was seen in 2015. In the graph below you can see how TLT an GLD correlations to SPY turned positive in October. Correlations of TLT and GLD become positive end of October. We have found this type fo behaviour to correlate to a strengthening dollar. UUP the ETF that tracks the dollar index is up 3% for the month, a fairly large move, causing the index to approach towards it's 2015 highs. We are taking this into consideration even though the environment is quite different this year. While commodities and foreign markets were crashed by the 2015 dollar move, selected markets are showing tremendous strength, namely coal (KOL:+69% [...]

2017-03-11T22:19:51+00:00 By |4 Comments

The Logical-Invest monthly newsletter for October 2016

Special topic: Passive Investment Logical Invest Investment Outlook October 2016 Our top year-to-date strategies: The Leveraged Universal strategy with 36.47% return. The Maximum Yield strategy with 36.37% return.  The World Top 4 with 19.82% return. SPY, the S&P500 ETF, returned 7.74%, year-to-date. News: Introducing Richard´s Corner, a new Logical Invest User Community, moderated by Richard Manley. Richard is  a long time user and critical commenter of our services. Subjects range from making the best of your 401K , using Fidelity or Vanguard funds to using our various tools, including our new QUANTtrader software. Coming soon in QUANTtrader: Reduced pricing for non-professionals as well as AUM based pricing for smaller RIA's and managers. Market comment: Following a quiet summer, volatility has increased this past month. It was first introduced in the bond market as participants became concerned about an upcoming rate hike as well as the effectiveness of central bank policy. This was reflected in a sudden 4% drop in the 20-year Treasury ETF (TLT ) during the first few days of September. The SP500 (SPY) also had it's first 3% sharp correction since July. Both these ETFs have since recovered but uncertainty has remained due to upcoming U.S. elections, world politics as well as the deterioration of Europe's most prestigious bank. Most of our strategies remained flat for the month although some experienced a correction during the first week. The Nasdaq100 was the best performer with a 3.39% return followed by GMRS at 2.52%. Our worst performer was the aggressive 3x UIS losing 1.88% for the month. We wish you a healthy and profitable October in your Passive Investment. Logical Invest, October 1, 2016 Strategy performance overview (Visit our site for daily updated performance tables.) [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container] Logical Invest performance October 2016 Passive Investment Special topic Passive Investment Read how to apply our development backtest software QuantTrader as a DIY investor or passive investment advisor to create your own Passive Investment in just a couple of minutes. Contact [...]

2017-02-26T15:18:25+00:00 By |9 Comments

The Logical-Invest monthly newsletter for September 2016

Special topic this month: Passive Investments Logical Invest Investment Outlook September 2016 Our top year-to-date strategies: The Leveraged Universal strategy with 39.09% return. The Maximum Yield strategy with 34.04% return.  The World Top 4 with 20.51% return. SPY, the S&P500 ETF, returned 7.73%, year-to-date. New tools: The Online Custom Portfolio Builder The Consolidated Signals tool. Market comment: The summer market showed strength compared to its seasonal bias. The old saying "Sell in May and go away" did not hold up this year as SPY rose 5% and emerging markets jumped 8% during the summer. We are now moving into the fall season with the SPY near all time highs and the VIX index at very low levels. September and October have, historically, been good entry points for equity investors that led them to bullish end-of-year returns. This coupled with the election cycle are all market positive factors. Whether a correction materializes in the next two months is anyone's guess. Our strategies are partially hedged with treasuries and should be able to handle such a correction better than buy and hold. In regards to strategy performance, not much changed during August. Our top two strategies remained flat, holding on to their exceptional YTD returns of 34% for MYRS and 39% for 3x UIS. Our average return of all our strategies is at 16.7%. August's winner was the Bond Rotation strategy, adding 2%, reaching a very respectable 12% for the year. Interestingly TLT lost 1%, another example on how our BRS bond strategy is not always correlated to the long term Treasury ETF. Last month's BRS positions in emerging market credit (PCY) and U.S. high-yield (JNK) did pay off.  The worst performer was our Global Sector Rotation, loosing 3% for the month. For September we favour our BUG strategy, the World Top 4, the Gold-USD and our stable Universal Investment Strategy. All=Strategy subscribers can read about our new tools can help allocate across strategies. We wish you a healthy and profitable September. Logical Invest, August 31, 2016 Strategy [...]

2017-03-11T22:20:21+00:00 By |11 Comments

The Logical-Invest monthly newsletter for August 2016

Logical Invest Investment Outlook August 2016 Our top year-to-date strategies: The Leveraged Universal strategy with 40.6% return. The Maximum Yield strategy with 34.3% return.  The World Top 4 with 20.6% return. SPY, the S&P500 ETF, returned 7.6%, year-to-date. News: Our in-house software is available for licensing to professional clients. We are looking for registered investment advisers and wealth managers to partner with.   Market comment: Sentiment across mainstream media remains cautious despite the S&P500 index breaking to a new all time high, on July 8th. Many investors continue to perceive both the S&P and Treasuries as overpriced and due for a correction. Increased geopolitical risk includes the recent coup attempt in Turkey and a highly unstable environment in Syria. Europe has somewhat recovered from the Brexit shock only to find itself in a new controversy over troubled Italian banks. The ECB is continuing the controversial path of negative rates policy and widespread corporate bond purchases. Increasingly low yields have many wealth advisors prepare their clients for an era of lower future returns while they issue warnings of increased volatility. Short term traders remain baffled at this somewhat 'unresponsive' market, where neither the Turkey failed coup or the news from Italy have managed to 'spike' the VIX, which has steadily crawled down to a low 11.8. And yet we are enjoying a wonderful year. Our top two strategies continue to provide handsome returns: 34% for MYRS and 40% for 3x UIS. Our average return of all our strategies is 15.8%. July was most kind to our Nasdaq 100 strategy as it recovered 9.5% from a recent correction. It is up 13.8% for the year. Our current leaders, the MYRS and 3x UIS strategies continue on to higher profits with July returning 8.6% and 7.8% respectfully. The World Top 4 strategy follows with 7.1%. The BUG leveraged added 3.7% and is up 15% for the year. Our core conservative UIS is at a respectable 12.9%. Looking at 3 month Sharpe ratios, we get a similar picture: The winners in risk adjusted performance [...]

2017-03-11T22:16:44+00:00 By |0 Comments