Rotation

The Logical-Invest newsletter for April 2019

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The Leveraged Universal Investment Strategy returns +13.3% for the month Free Enhanced Permanent Portfolio and BUG strategies return 3% and 2% Thank you FED (again) On March 20th the Federal Reserve announced that it will leave its benchmark rate unchanged at 2.25% to 2.50%, also indicating that no rate hikes would be likely this year. This is a substantial change in stance from December, when the Fed projected that as many as two rate hikes … Read more

The Logical-Invest newsletter for March 2019

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We updated our QuantTrader software to version 515S. Read about changes to our strategies. If you are using QuantTrader, this time you need to manually update it, please download from here.   Thank you FED These first two months of 2019 are a prime example of how sensitive markets have become to interest rate policy. Following the December move in the S&P 500 which painted a negative year for US Equities, Chairman Jerome Powell signaled … Read more

New QuantTrader version 515S available for download

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We have prepared a new version of QuantTrader which will be used to generate the Logical-Invest signals for the month of March. So please make sure you will use the new version from now on. If you are using the new version with your own strategies, you will need to re-optimize the strategies to get the same performance as with the old QuantTrader 514S version. When you do this you will probably to try out … Read more

Enhancing Harry Browne’s Permanent Portfolio strategy using ETFs and monthly rebalancing

Harry Browne Permanent Portfolio allocation

Enhancing Harry Browne’s Permanent Portfolio The Permanent Portfolio is a simple, diversified portfolio You can construct it using 3 ETFs: SPY, TLT and GLD We enhance it by allowing variable allocations and monthly rebalancing We offer a free subscription so you can implement it in your own account including 401k or IRA  What is the Permanent Portfolio by Harry Browne Harry Browne’s intention was to find a solution for the money “you need to take care … Read more

The Logical-Invest newsletter for February 2019

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Our top 3 strategies this past month: Leveraged Universal Investment strategy with +7.5% return. Maximum Yield strategy at +4.3% U.S. Sector strategy (free to subscribe) at +3.1% News: Alex’s new post describes the process of blending Portfolios (rather than Strategies or ETFs) using the Portfolio Builder. Bouncing into 2019 Three fundamental trends to watch as 2019 unfolds: The first trend includes the reversal of QE in the U.S, the end of the asset purchase program of … Read more

The Logical-Invest monthly newsletter for December 2018

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Logical Invest Investment Outlook December 2018 The graph below is from a recent Bloomberg article entitled “A Brutal Global Market in 2018 Has Just One Champion“. That one champion, according to the article, was Treasury bills. It goes on to say: “By one simple measure, this is the worst cross-asset performance in more than a century“. Below you can see 89% of all assets had negative performances year-to-date (as of Nov. 22). This may be an exaggeration … Read more

Logical-Invest Investment Strategy changes for 2019

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We have made some quite important changes to the Logical Invest strategies for 2019. Please note that the January strategy allocations will be calculated based on these updated strategies. 401 / IRA compliant base strategies The new strategies will not use leveraged or inverse ETFs, making them and the portfolios derived from them, more 401 / IRA friendly. The changes have been backtested and do not reduce the performance of the strategies due to a … Read more

The Logical-Invest newsletter for January 2019

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Must reads: Frank Grossmann’s article “How to Hedge in Times of Market Trouble” (Seeking Alpha, LI Blog) 2019 strategy updates (LI Blog) Protecting your money After almost 10 years of a continuous bull market and 2 years of exceptional growth (2016-2017), 2018 was the first year that the SP500 turned negative. Apart from the dollar index, most asset classes also fell. To make things worse, the S&P500 dropped -20% from the September highs during what is … Read more

The power of diversification: Portfolio Diversification with Logical Invest Strategies

Portfolio Diversification

Diversification is a cornerstone to successful investing. In simple form, when measurably diverse assets are combined in a portfolio, the investors portfolio risks are reduced without any sacrifice of returns. This is a rare “free lunch”, it is well accepted part of modern financial portfolios, and to stay financially healthy it is important not to skip lunch. When one asset is going down while the other is going up, the portfolios risk is reduced without the normal penalty of risk/return trade-offs. We take advantage of that when our systems dynamically blend things like the S&P 500 and treasury bonds, which often exhibit negative correlation to each other (which is ideal).

Applying Portfolio Diversification to Strategies: Our subscribers can take this take a step further. Our investing algorithms take on a blend of the properties of their underlying assets combined with the “alpha” edges from the investing rules. The returns of each investing strategy should be thought of as an asset, which are different and unique from the underlying holdings. So holding a portfolio of strategies functions much like holding a portfolio of assets. To evaluate the risk profile of the strategy, we examine the history of the returns of those strategies, much like when holding a basket of stocks the historical returns of each stock would be evaluated.