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The Logical-Invest monthly newsletter for August 2017

Logical Invest Investment Outlook August 2017 Our top 2017 investment strategies, year-to-date: The Maximum Yield strategy with 46.05% return. The Leveraged Universal strategy with 27.11% return.   The NASDAQ 100 strategy with 19.29% return. SPY, the S&P500 ETF, returned 11.42%. News: Our professional portfolio software QuantTrader has reached version 5.0 with improvements including being able to load your custom set of strategies and a new consolidated signals screen. You can now allocate your funds in multiple strategies and have QuantTrader calculate the number of shares of each stock/ETF you need to buy.   QuantTrader Consolidated Signals   Market comment: Just as we mentioned in our last June newsletter, we continue to observe low volatility and a weakening dollar. The VIX index hit a record low on July 26th, falling temporarily to 8.84, a level last seen back in 1993. Moreover the index stayed under the 10 level for 10 consecutive days showing persistence.  The U.S. dollar fell to a 13-month low against a basket of currencies. The Euro has broken to the upside, reaching 1.18 against the dollar, a level last seen before December 2014. The Euro is 11% up year-to-date. Certain commodities that have had terrible returns for the past years are this month's top performers: Sugar, Gasoline, U.S. diesel Heating oil, Nickel, Coffee and U.S. oil (USO) ETFs all gave more than 10% returns for the month. Of course if you look at a graph you will see this is just a tiny reaction to multi-year bear markets. Taking advantage of the extended low volatility environment, out top strategy, the Maximum Yield strategy, added another +5.93% to reach +46.79% return for the year.  The Universal Investment 3x strategy added 2.54% for a +27.11% YTD return. All our other strategies were positive in July. The exception was the Nasdaq 100 strategy that corrected -3.1% causing this month's allocations to change significantly. As [...]

2017-08-01T07:02:24+00:00 By |2 Comments

The Logical-Invest monthly newsletter for July 2017

Logical Invest Investment Outlook July 2017 Our top 2017 investment strategies, year-to-date: The Maximum Yield strategy with 38.54% return. The Leveraged Universal strategy with 23.91% return.   The NASDAQ 100 strategy with 23.07% return. SPY, the S&P500 ETF, returned 9.17%. News: Our professional portfolio software QuantTrader continues to evolve and can now download data from 3 different providers: Tiingo, Yahoo and Google. Tiingo is an inexpensive solution for DYI investors that need good quality dividend-adjusted end of day data. Market comment: The U.S. Federal Reserve raised its benchmark federal-funds rate on June 15th by a quarter percentage point and hinted to further hikes. Individual investors remain skeptical of the bull market as the AAII survey shows 43.4% being neutral (historical average is at 38%). Mainstream market analysts keep a positive outlook quoting decreased risks and equity strength in Europe, global strength in developed and emerging markets, low unemployment in the U.S. and a sense that the Fed's tightening is predictable. We continue to see a low volatility environment and a weakness in U.S. dollar for 2017 which benefits non-U.S. stocks, bonds as well as gold. The European market returned 17% YTD while India and China achieved 20%+ returns for the year. UUP ETF (U.S. Dollar Index)   Out top strategy, the Maximum Yield strategy, added another +6.85% to reach +38.5% return for the year.  The Universal Investment 3x strategy had a correction in the last few days of July but came out positive adding +1.66% for a +23.9% YTD return. Both the Nasdaq 100 and the U.S. Sector strategies had corrections: -1.98% and -2.47% to achieve +23% and +5% YTD  respectively. All other strategies remained flat with gains/losses below 1%. A final note: We do keep a watchful eye on recent developments in the crypto-currency markets as Bitcoin and Ethereum are attempting to make their way into the mainstream. It may be [...]

2017-07-02T10:05:11+00:00 By |6 Comments

The Logical-Invest monthly newsletter for June 2017

Logical Invest Investment Outlook June 2017 Our top 2017 investment strategies, year-to-date: The Maximum Yield strategy with 29.66% return. The Leveraged Universal strategy with 21.89% return.   The NASDAQ 100 strategy with 21.80% return. SPY, the S&P500 ETF, returned 8.48%. News: Our brand new U.S. Sector Rotation made its live debut with a +2.53% return for the month. You can subscribe for free. Market comment: Both the U.S. equity and the U.S. bond markets were positive for May. SPY (S&P 500 ETF) added +1.41% and TLT (30-Year Treasury ETF) added +1.89%. Even though SPY is reaching new all-time heights, it under-performed many of our strategies and in particular the ones with foreign exposure, such as the World-Top 4, Global Market and Global Sector Rotation strategies. This shows that the U.S equity market is slowing down compared to foreign and emerging markets. On the other hand, Brazil, with a, -18% drop on May 18th reminds us that these markets suffer from local political risk and need to be properly hedged and diversified. Our top 3 strategies continue to be the biggest gainers for May. Our 3x UIS strategy added another +4.3%, the MYRS added +3.11% and the Nasdaq 100 added +2.99%. On the 4th and 5th spot are the Global Market rotation(+11.23% YTD) and Global Sector Rotation (+11.75% YTD) strategies. Summer is often volatile. Our slow and steady risers cam limit your risk: BRS (+6.81 YTD%) and the BUG (+6.29% YTD) bond-based strategies. We wish you a healthy and prosperous 2017. Logical Invest, June 1, 2017   Logical Invest strategy performances May 2017 Strategy performance overview: Visit our site for daily updated performance tables. 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 [...]

2017-06-01T08:07:41+00:00 By |0 Comments

The Logical-Invest monthly newsletter for May 2017

Logical Invest Investment Outlook May 2017 Our top 2017 investment strategies, year-to-date: The Maximum Yield strategy with 25.75% return. The  NASDAQ 100 strategy with 18.26% return.   The Leveraged Universal strategy with 16.86% return. SPY, the S&P500 ETF, returned 6.97%. News: Our new U.S. Sector Rotation strategy is live (and for a limited time, free!). Unlike what you may have seen before, this strategy consists of 5 sub-strategies tracking sector momentum, mean reversion and relative under-performance to create a variable-beta play on the U.S. market. And yet it is very simple to implement. Give it a try. Thank you for your support of our QUANTtrader forum were you can share and discuss your own custom strategies.   Market comment: As we are heading into early summer, most assets classes are performing well partly due to a weakening U.S. dollar. Domestic equity continues to reach new highs, foreign and emerging equity markets are up while junk bonds and foreign bonds have now recovered from past corrections. Commodity performance is mixed but commodities do present a longer term opportunity for portfolio unclusion, as inflation resistant assets. Treasuries remain flat. The story in the media is that we are entering a more mature business cycle in the U.S. while foreign markets (China, India, Brazil and partly Europe) are also in growth and recovery mode. The sentiment is positive, at least as far as the major management companies go while individual investors are cautious, expecting a possible U.S. equity correction. The year long expectation of higher volatility due to tighter policy still is discussed but we have not seen this in the actual market. Far from it, we are seeing extremely low volatility levels compared to historical norms as well as perceived political risk in the U.S. and Europe. Our strategies performed as expected. Maximum Yield strategy added another 3.42% in April, keeping it in our top spot at +25.75 for the [...]

2017-04-29T14:57:16+00:00 By |1 Comment

The Logical-Invest monthly newsletter for April 2017

Logical Invest Investment Outlook April 2017 Our top 2017 investment strategies, year-to-date: The Maximum Yield strategy with 21.58% return. The  NASDAQ 100 strategy with 15.00% return.   The Leveraged Universal strategy with 13.02% return. SPY, the S&P500 ETF, returned 5.92%. News: Try our QUANTtrader software with our 30-day free trial. There is no better way to understand how our strategies work. Join our new QUANTtrader forum were users dare adjust the strategies and share new ones! Check our new European section.  Our in-depth 2-hour QUANTtrader webinar, with Frank Grossmann. Get a behind-the-scenes look at our strategies. We updated our web-site home page and menu.   Market comment: For the second time in three months, the Federal Reserve increased its benchmark interest rate a quarter point taking the overnight funds rate to a target range of 0.75 percent to 1 percent. Treasuries had small comeback since then signalling that the market had already priced in the Fed move and was bracing for a much more hawkish tone. Treasuries are once again negatively correlated to the equity market which is a positive for our strategies. The market is expecting two more hikes, in June and December. Volatility continues to be extremely at low levels, sending the ZIV etf (medium term inverse VIX etf) and our Maximum Yield strategy to new highs. Just like last month, what is interesting is the unnaturally low expectation of future volatility, with 8-month out VIX futures being below the 17 price level. Last month's VIX Futures term structure:   VIX term structure February 28th 2017 This month's VIX Futures term structure:   VIX term Structure March 31st 2017 This continuing "flattening" of the curve is unusual. In plain terms, future expected volatility levels seem to be low even though we are looking at upcoming French elections, Brexit negotiations as well as U.S. policy uncertainties. Investors seem fearless as the U.S. market is still at the top of the price chart. Investors may want [...]

2017-04-20T11:02:20+00:00 By |0 Comments

The Logical-Invest monthly newsletter for March 2017

Logical Invest Investment Outlook March 2017 Our top 2017 strategies, year-to-date: The Maximum Yield strategy with 14.90% return.  The Leveraged Universal strategy with 13.97% return. The  NASDAQ 100 strategy with 11.28% return.  SPY, the S&P500 ETF, returned 5.79%. News:  Our in-depth  2-hour QUANTtrader webinar, with Frank Grossmann. Get a behind-the-scenes look at our strategies. We are testing a new U.S. Sector-based strategy that should be available in the coming months.   Market comment: The S&P 500 is reaching new all time highs, currently at +10% from it's previous support in the summer of 2016. It is following a straight line with no major corrections since the U.S. elections. This type of movement makes investors nervous about a coming correction. Interestingly, looking at the VIX term-structure we see the following picture: VIX term structure February 28th 2017 This is highly unusual. Having near-month VIX contracts at very low prices is normal as the SP500 is breaking upwards. What is interesting is that far-out contracts are at extremely low levels as well, making the curve somewhat flatter than normal. This implies that market participants expect low levels of volatility in the future, even 9 months out. We will see how this plays out in the coming months. Our top 3 strategies are all U.S. market based and have achieved returns above 10% in just 2 months. Our Maximum Yield strategy, has returned an additional 4.1% in February, bringing year-to-date returns to 15%. Our 3x UIS strategy added 9% due to equity performance as well as a small upward reaction from oversold Treasuries. Our Nasdaq 100 added just 1.2% for the month. Of note is that the Nasdaq strategy has the lowest 60-day correlation to SPY, just 0.36, second only to our Gold-USD strategy's 0.18. Apart from our high flying strategies, it is worth mentioning and tracking our more defensive ones. Our Universal Investment Strategy [...]

2017-03-21T01:22:43+00:00 By |0 Comments

The Logical-Invest monthly newsletter for February 2017 – Topic 401k Strategies

Our special topic this month are 401k Strategies Logical Invest Investment Outlook February 2017 Our top 2017 strategies: The Maximum Yield strategy with 10.29% return. The  NASDAQ 100 strategy with 9.88% return.   The Leveraged Universal strategy with 3.96% return. SPY, the S&P500 ETF, returned 1.79%. Market comment: 2017 started up as a different type of year. Not just in politics. Despite the unprecedented political uncertainty, volatility in the SP500 dived this month causing our volatility harvesting strategy, Maximum Yield, to return more than 10% in just one month. Our Nasdaq 100 strategy returned 9.88%.  All other strategies were positive for January but with smaller gains of 1-3%. The only negative strategy for the month was the Gold-USD strategy at -2.06%. We would like to take this opportunity to thank two of our longer-term subscribers for their feedback, comments and support: Deshan, comment posted January 29, 2017: "Looking back at these comments from many months ago gave me a chuckle. Looked like the world was gonna end and the LI strategies were going down too. I feel badly for those that gave up. I stayed the course and am very happy customer." Read more.... Richard, author at Richard's Corner. "The universe of options for a conservative retiree who would like both some performance as well as low risk in a simple, stand-alone investment has proven difficult to find...". Read more...   We wish you a healthy and prosperous 2017 and good performance in your 401k Strategies Investment.  Logical Invest, February 1, 2017   Strategy performance overview: Logical Invest Performance January 2017 Visit our site for daily updated performance tables. Special topic 401k Strategies Do you know that our Backtest Software QuantTrader allows you to build your custom 401k Strategy in only a couple of minutes? Mix your plan sponsor assets into custom Strategies, see our recent High Performance Strategies webinar. Contact us to learn more. [...]

2017-03-13T19:03:21+00:00 By |1 Comment

Logical-Invest monthly update January 2017 – Topic 401k Investments

Special topic this month: 401k Investments Logical Invest Investment Outlook January 2017 Our top 2016 strategies: The Maximum Yield strategy with 29.92% return. The Leveraged Universal strategy with 22.33% return.   The NASDAQ 100 strategy with 21.54% return. SPY, the S&P500 ETF, returned 12.00%. Market comment: To put 2016 in perspective, we must go back to 2015 and remind ourselves how the rising dollar environment affected diversified investors. Most asset classes suffered through 2015. The S&P 500 stayed flat, long term Treasuries lost 2%, gold lost 9%, emerging markets shed 17% and USO, the crude oil ETF was down 44%. To make things worse, in August 2015 there was a sharp correction in equities which caused many "weak hands" to just exit the market. The first half of 2016, by contrast, rewarded anyone holding any of these assets.The second half proved far more challenging as rising yields expectations depressed bond prices, with TLT loosing 16% from July to December. Expecting higher yields in the U.S. can cause an appreciation in the U.S. dollar which in turn causes weakness in dollar denominated assets like gold and foreign equity. All of these assets gave back some of the early 2016 gains. Two major events, the Brexit vote and U.S. elections proved to be much less disruptive than expected. For 2016, The S&P 500 returned 12%, long term Treasuries gave up early gains to stay flat and gold gained 6%. Emerging markets gained a respectable 14%. All our strategies were positive for the year. Our 'non-equity' strategies did well outperforming their respective benchmarks:  Our volatility harvesting strategy (MYRS) returned 29.92%. Our Bond rotation strategy (BRS) returned 13.62%, compared to 1% for TLT and 2.4% for AGG. Our Gold hedged strategy (Gold-USD) returned 15.74% compared to 6% for Gold. For 2017, in preparation for rising yields, we have adapted our strategies to rely less on the 30-year Treasury ETF (TLT). We introduced inflation [...]

2017-03-13T19:00:47+00:00 By |1 Comment

Strategies For Trading Inverse Volatility

Update: You can see the most recent performance our our inverse volatility strategy here. Consult vixcentral for the daily VIC term curve. In this paper, I present five different strategies you can use to trade inverse volatility. Why trade inverse volatility you ask? Because since 2011, trading inverse volatility was probably the most rewarding investment an investor could make in the markets. Annual returns of between 40% - 100% have been possible which crushes any other strategy I know. Smartly Trading inverse volatility In modern markets, the best way to protect capital would be to rotate out of falling assets, like we do in our rotation strategies. This is relatively easy, if you are invested only in a few ETFs, but it is much more difficult, if you are invested in a lot of different shares. In such a situation an easy way to protect capital is to hedge it, going long VIX Futures, VIX call options or VIX ETFs VXX. If you trade inverse volatility, which means going short VIX, you play the role of an insurer who sells worried investors an insurance policy to protect them from falling stock markets. To hedge a portfolio by 100% an investor needs to buy VXX ETFs for about 20% of the portfolio value. The VXX ETF loses up to 10% of it's value per month, because of the VIX Futures contango, so this means that scared investors are willing to pay 1.5-2% of the portfolio value per month or around 25% per year for this insurance. Investing in inverse volatility means nothing more, than taking over the risk and collecting this insurance premium from worried investors and you can capitalize on this with a few simple strategies, which I will show you below. Something seems afoot. Why do investors pay 25% per year [...]

2017-04-26T06:38:57+00:00 By |38 Comments

The NASDAQ 100 Meta-Strategy – Stock Selection and Compact Meta-Strategy

Intelligent Algorithms run two prallel sub-strategies. Meta- layer chooses between the two sub-strategies based on current market conditions. Variable allocation to Treasuries provides protection from large drawdowns.This strategy is a good fit for investors that want to invest intelligently in the U.S. equity market as well as for stock-pickers looking for a rules-based growth strategy. The strategy can also complement our existing strategies and can work well with our more conservative strategies like BRS (bond rotation), the BUG or with non-U.S. equity strategies like World Top 4.

2017-04-20T01:41:00+00:00 By |14 Comments