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The new reviewed Bond Rotation Strategy

From the next strategy email on, the Bond Rotation Strategy will also use adaptive ETF allocation, to make is more suitable as IRA or 401k Investment Strategy. This new technique allows a 30% higher Sharpe (return to risk) ratio. Together with this change we have also changed the ETF selection from the old: AGG - iShares Core Total US Bond (4-5yr) BOND - PIMCO Total Return ETF CWB - SPDR Barclays Convertible Bond HYLD - AdvisorShs Peritus High-Yield Bond (3-4yr) SHY - Barclays Low Duration Treasury (2-yr) TLH - iShares Barclays 401k 10-Year Treasury (9-11yr) Ro the new ETF selection: CWB - SPDR Barclays Convertible Bond JNK: SPDR Barcap High-Yield Junk Bond (4-7yr) PCY: PowerShares Emerging Mkts Bond (7-9yr) TLT: iShares Barclays 401k Long-Term Trsry (15-18yr) The new BRS strategy does not need the total US market bonds AGG and BOND anymore. In fact for the old strategy, these bonds have been used to simulate an intermediate mix between treasuries and corporate bonds. The new BRS strategy can now invest in any mix of these bonds due to the adaptive allocation. Also the SHY (cash) ETF is not necessary anymore, because the allocations will be automatically reduced to zero if this would be necessary. Excellent features as an IRA or 401k Investment Strategy We also go back to the passively managed JNK high yield junk bond after the actively managed HYLD junk bond was showing an extremely bad performance these last months. So better don't have any fund manager interfering with the strategies in the future. New is the emerging market sovereign debt bond PCY which gives the strategy some international diversification. TLH has been replaced by the more liquid TLT treasury ETF. All together, the strategy becomes simpler, with less ETFs, but with a significantly better performance. We recently were approached by a subscriber [...]

2017-10-02T20:00:00+00:00 By |5 Comments

Logical Invest Strategy Performance for 2014

Dear investors, In general 2014 was quite a difficult year for investors, so we want to summarize and comment our strategy performance. Apart of the US market, all global markets finished the year with negative performances. SPY 13.46% (S&P 500 US market) FEZ -9.75% (Euro Stoxx 50) EEM -3.89% (MSCI Emerging Markets) EPP -1.92% (MSCI Pacific ex-Japan) ILF -12,29% (S&P Latin America) AGG 5.99% (Core Total US Bond (5-6yr)) Our Strategy Performance See here for a most recent Strategy Performance overview. However, most of the negative performance of these foreign market ETFs is due to the strong US$. The Euro lost 12% on the US$ and the US$ index UUP is 10% higher.  In fact, the USD/EUR hedged DBEU (MSCI Europe) ETF had a +4% performance, which is nearly 15% better than the USD denominated FEZ.  It is very difficult to forecast the influence of exchange rates on our strategies.  All this is driven by the Yellen and Draghi, but longer term, a strong US$ will make European and Asian markets more competitive.  So, we will probably see a rotation away from the US market to some foreign markets at some point. In spite of the global weakness and currency dislocations, the rotation strategy performance came through flat to up nicely for the year, and all had a strong year with hedging.  We had 5 intermediate short market corrections, which typically had a 2 week pullback of up to 10% and then a very fast recovery.  This sort of whipsaw market is not ideal for our rotation strategies.  At least for the old style of rotation strategies which always switched 100% between stock market ETFs and treasuries.  2014 was also a very strong year for treasuries, which again proved all analyst forecasts wrong. The 20% treasury hedge which I promoted since February 2014 had a very positive [...]

2017-10-02T20:00:00+00:00 By |7 Comments

New Beta Tool: Easy Consolidated Signals for your “All Strategies” Custom Portfolio Now Available

UPDATE: The tool is now available following this link     “What? Another post about tools and infrastructure? Thought Logical Invest is going to show me the next 21st Century ETF Investment Strategy!”     Yes, I know there have been plenty of posts regarding new features on our site, new portfolio options, new charting capabilities, and new portfolio builder features. Plus plenty of teasers of what is coming up in regard of strategies and meta-strategies. Is the Logical Invest team now only busy on this nice-to-have-but-not-money-making stuff? No, we’re not, our purpose and motivation has not changed! We’re determined to be your first choice for your smart investments! But based on your feedback, and seeing that more and more of you migrate from employing single-strategies towards blends and full-fletched portfolios of strategies, we know we need to develop our infrastructure to keep up with our pledge: “A few simple switches a month, which can be done in 15 minutes” We’ve given an insight into our long-term vision in our last (yes, silent) video, which is: Single Strategies for complementing your existing portfolio, or Full fixed-weight blends or portfolios of our strategies (Portfolio Builder), or  Dynamic and smart meta-strategies which adapt to changes in market environment and strategy performance – Breaking through the traditional (more or less) efficient frontiers, or Top-notch custom portfolio solutions made to spec for larger accounts and institutional money managers. Now, while this means a time-warp evolution in performance and robustness, it undoubtable also means an increase in the complexity. Means, we need to provide you with tools to keep the execution process easy, and allow you to enjoy your free-time with your most beloved instead of doing advanced Excel Acrobatics on weekends.   “Ok, got you. But where does this lead us?”       [...]

2017-10-02T20:00:00+00:00 By |26 Comments

Easy Investing in a multi-strategy Markowitz optimized Portfolio

In our recent post we´ve shared some powerful options to design a well-balanced portfolio of several Logical Invest strategies to achieve a preset portfolio objective using Modern portfolio theory (MPT) techniques developed by Nobel Prize laureate Harry Markowitz. Here, we review the steps to achieving an optimized portfolio with our tools and summarize some portfolio options to illustrate use of our updated tool set:(picture for mobile use)These options might serve as a starting point to design your own portfolio according to your return and risk preferences, fundamental beliefs or asset class preferences.How do I start easily designing my portfolio?You can design a portfolio to meet your objectives in three simple steps that will not take you more than 30 minutes initially, and about 15 minutes monthly for rebalancing: Design and Execute your Custom Portfolio Starting with our Online Custom Portfolio Builder, you can simply select a preset portfolio objective. The tool will report back the allocation across our strategies that achieves that objective based on our quantitative models, and on portfolio optimization procedures that analyze the last 2105 trading days. Additionally, the user can select the “Custom Portfolio” tab, enter any strategy allocation weights he wishes and similarly calculate the performance of his custom allocation. Combined with our “Consolidated Signals” tool which we will introduce in a minute, the results from Portfolio Builder will point the user to the allocation across ETFs and/or stocks that have the best prospect to meet his objective.A Practical Example:Here is a practical example: Let´s assume I  think a historical portfolio volatility of around 15% in the period 2008-2016 is acceptable to me I would simply choose the “Max15% Volatility” (and Max CAGR) portfolio from the preconfigured portfolio list. Strategy allocation weights are immediately shown in the performance table and the portfolio risk/return performance is graphed in comparison to that [...]

2017-10-02T20:00:00+00:00 By |2 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 [...]

2017-10-02T20:00:00+00:00 By |11 Comments