Rotation

QuantTrader users: Please update your software! See instructions at the end of this newsletter.* Paradigm Shifts Ray Dalio of Bridgwater and “All Weather” portfolio fame has published a very interesting article. Entitled ‘Paradigm Shifts”, he takes a long term outlook and makes a case for gold: “….I have observed there to be relatively long of periods (about 10 years) in which the markets and market relationships operate in a certain way (which I call “paradigms”) … Read more

Up, up and up The FED is at it again! With Fed’s June 19 statement, expectations for three rate cuts were set, one possibly coming as soon as this month. This made the markets rally again erasing any previous losses and propelling the S&P 500 back to it’s previous high. The index seems to have priced in the move, which leaves us at a somewhat uncomfortable position: The possibility of the markets actually doing well … Read more

May 2019: Go-to-cash mechanism On last month’s newsletter we asked the question: Can the index (S&P 500) continue higher? The answer we gave is that we do not know so it best to follow rules and be protected. Last month our ‘go-to-cash’ mechanism kicked in. Most of our strategies allocated a large chunk to GSY, a short duration ETF which is almost equivalent to holding cash. This was somewhat counter-intuitive as the market reached new … Read more

Recovery priced-In At the start of the year, markets were driven higher because of the more dovish Fed (see our previous newsletters “Thank You Fed I & II“). This is now priced in. On top of that markets pushed higher on hopes of a US-China trade agreement. This has now been partially priced-in as well. We are now in a situation where the S&P500 has completely reversed last year’s correction and has a year-to-date performance … Read more

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