Logical Invest
Investment Outlook
June 2016
Our top year-to-date strategies:
- The Leveraged Universal strategy with 17.1% return.
- The Maximum Yield strategy with 16% return.
- The Nasdaq 100 with 7.58% return.
SPY, the S&P500 ETF, returned 3.46%, year-to-date.
Market comment:
This year, the old saying “sell in May and go away” seems to express many financial writers and investors. The March-April excitement has been replaced by fear and caution: A possible June rate hike by the Fed, the June 23rd British referendum over EU membership and a coming oil/commodities/foreign exchange correction are all quoted as market risks. The AAII sentiment survey shows that only 17.8% of individual investors expect the market to rise in the next 6 months. This reading is extraordinary: The last time so few investors had bullish expectations was not in 2009. It was in 2005.
In this backdrop of sceptic writers and fearful investors, the S&P 500 index is once again reaching new heights defying various bear predictions. Bonds, having had an excellent 6 month run, have stayed flat for May as a future rate hike is being priced in. The expected Fed move is seen as dollar positive, which could explain the correction in commodities, foreign exchange and emerging market indices.
Another argument for the bulls, is the fact that we are in the midst of an election year, which historically has been market positive. So far 2016 has been very bullish for most asset classes and it remains to be seen how this positive pre-election bias gets counteracted by what usually is a more volatile summer market.
This past month (May 2016) our strategies followed the pattern of strong U.S. equity performance and an emerging market / commodity price correction. The Nasadaq 100 strategy returned 3.7%. The Maximum Yield strategy came in at 3.2% followed by the aggressive version of our Universal strategy at 3.5%.
In the same period, SPY returned 1.7%.
The World Top 4 and GLD-USD strategies corrected but still held on their year-to-date positive returns (+5.7% and +6.9% respectively).
Although we do have a positive longer term outlook our models favor caution picking allocations to BRS, UIS, GSRLV and Nasdaq 100.
We wish you a healthy and profitable June.
Logical Invest, May 31 2016
Strategy performance overview:
| symbol | close | year to date % ▴ | 3 month % | 1 month % | 1 day % | 60 day volatility | 60 day correlation | 3 month Sharpe | 12 month Sharpe | 36 month Sharpe | LastModified: 6/1/2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| UIS-SPXL-TMF | 5902.42 | 17.15 | 10.73 | 3.28 | 0.08 | 15.03 | 0.40 | 5.61 | -0.21 | 1.95 | |
| MYRS | 652.50 | 15.99 | 6.07 | 3.53 | 0.41 | 17.17 | 0.44 | 2.41 | 0.24 | 1.28 | |
| TLT | 130.16 | 8.80 | 1.76 | 0.81 | 0.24 | 10.62 | -0.54 | 1.05 | 1.07 | 0.81 | |
| NASDAQ 100 | 1070.87 | 7.58 | 10.00 | 3.73 | 0.07 | 12.80 | 0.59 | 5.93 | 1.62 | 2.74 | |
| GOLD-USD | 284.89 | 6.96 | -2.78 | -2.53 | 0.16 | 9.65 | -0.31 | -1.75 | 0.71 | 1.40 | |
| BRS | 263.37 | 6.71 | 2.52 | -0.08 | -0.05 | 5.42 | 0.15 | 3.00 | 0.71 | 1.84 | |
| UIS | 489.23 | 5.94 | 3.86 | 1.25 | 0.02 | 5.23 | 0.38 | 4.93 | 0.34 | 2.03 | |
| WORLD-TOP4 | 280.50 | 5.74 | 6.50 | -4.41 | 0.16 | 14.00 | 0.23 | 3.04 | -0.51 | 2.08 | |
| GSRLV | 496.07 | 4.51 | 1.76 | 0.48 | 0.00 | 6.67 | 0.12 | 1.64 | -0.03 | 1.20 | |
| SPY | 209.84 | 3.46 | 6.47 | 1.70 | -0.19 | 11.15 | 1.00 | 4.45 | 0.11 | 1.15 | |
| AGG | 110.70 | 3.31 | 1.45 | 0.01 | 0.06 | 2.53 | -0.26 | 3.51 | 1.49 | 1.21 | |
| BUGLEV | 277.36 | 3.21 | 2.84 | -0.94 | 0.17 | 6.85 | 0.02 | 2.46 | -0.70 | 1.13 | |
| BUGST | 209.96 | 0.74 | 1.82 | -1.12 | 0.12 | 5.52 | -0.17 | 1.92 | -1.20 | 1.00 | |
| GMRS | 3765.71 | -0.34 | -0.69 | -1.37 | 0.11 | 10.12 | 0.42 | -0.41 | -1.27 | 0.11 |
Symbols:
BRS – Bond Rotation Strategy
BUGST – A conservative Permanent Portfolio Strategy
BUGLEV – A leveraged Permanent Portfolio Strategy
GMRS – Global Market Rotation Strategy
GMRSE – Global Market Rotation Strategy Enhanced
GSRLV – Global Sector Rotation low volatility
NASDAQ100 – Nasdaq 100 strategy
WORLD-TOP4 – The Top 4 World Country Strategy
UIS – Universal Investment Strategy
UIS-SPXL-TMF – 3x leveraged Universal Investment Strategy
AGG – iShares Core Total US Bond (4-5yr)
SPY – SPDR S&P 500 Index
TLT – iShares Barclays Long-Term Trsry (15-18yr)