- For Top 4 World Strategy subscribers: The MSCI Columbia ETF GXG changed its name to COLO. Please use the current ETF short name.
Markets in July
A Historic Month for Cryptocurrency: July 2025 will be remembered as a breakthrough month for digital assets as Bitcoin soared past $120,000. This incredible rally was ignited by “Crypto Week” (July 14-18), during which the U.S. passed the GENIUS Act and other friendly legislation, providing long-awaited regulatory clarity that attracted a flood of institutional investment.
The Federal Reserve Holds Steady: In its meeting on July 29-30, the FOMC decided to maintain the federal funds rate at 4.25% to 4.50% for the fifth consecutive meeting. While this was expected, the decision was not unanimous; two governors dissented in favor of a rate cut, signaling a growing debate within the committee about the economic path forward.
Geopolitical Tensions Escalate: On the global stage, trade disputes between the U.S. and China continued, with new tariffs disrupting supply chains. Furthermore, the conflict between Israel and Iran heightened instability in the Middle East, adding to volatility in energy markets.
Performance
Strategy Spotlight: The Top 3 Strategies (MST3)
A favorite among our subscribers, the Top 3 Strategies (MST3), continues to demonstrate the power of building a portfolio with diversified, rules-based models. This meta-strategy combines three of our core strategies into one, creating a robust portfolio that adapts to changing market conditions. Its performance so far in 2025 is a perfect case study.
Impressive Performance with Lower Risk
Year-to-date, the Top 3 Strategies has delivered a return of 15%, significantly outperforming the SPDR S&P 500 (SPY), which returned 8.5% over the same period.
However, the headline return only tells part of the story. The real strength of this approach is in its risk management. The strategy has achieved this outperformance with roughly half the volatility of the market (11.6% vs. 23.9% for SPY). Most impressively, its maximum drawdown for the year has been a mere -4%, compared to the jarring -19% drawdown experienced by SPY investors. The performance chart clearly visualizes this, showing a much smoother path to growth throughout the year.
Adapting to a Changing World
So, how does it achieve this? By being adaptive. Our models are designed to identify and rotate into assets with the strongest momentum. A look at the July allocations shows the strategy’s recent shift toward international markets, finding opportunities outside of the U.S..
The portfolio last month’s allocations include holdings in foreign equities ETFs including Poland (EPOL), Singapore (EWS) and Brazil (EWZ). This isn’t a discretionary call—it’s the quantitative model objectively following strength wherever it emerges. At the same time, it maintains significant defensive positions in Gold (GLD) and inflation-protected securities (VTIP), which are key to its low volatility and capital preservation.
This dynamic approach—participating in global growth while rigorously managing risk—is what makes the Top 3 Strategies a cornerstone for many of our investors.
Sincerely,
The Logical-Invest.com Team
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