Logical Invest
Investment Outlook
February 2016
Market comment:
Equities sold off aggressively in the beginning of the year making this January one of the worst of the last 20 years. The market managed to start a small rebound just in the last few days leaving traders pondering if this is another temporary correction or the start of a bear market. In absence of evidence of a more pronounced global economic slowdown, the recent selling looks overdone. Many markets are back to prices last seen several years ago and this means that some bargains are starting to emerge.
The main driver of this correction was commodity prices hitting multi year lows and oil breaking below the 30$ a barrel resistance. Another factor were earnings reported for Q4 of 2015 which missed overly optimistic investor expectations. This was especially true for high tech Nasdaq 100 companies.
From our point of view, a major market characteristic returned back to normality: Traditional safe harbor assets, namely Treasuries and Gold. They both performed very well and were negatively correlated to the equities market thus providing a much needed protection. Due to this fact, most of our strategies performed significantly better than their benchmarks. Recent gold strength also helped our newest addition, the Gold-Currency strategy which had a good start at 3% return for the month.
Teasuries also profited from the fact that most analysts abandoned the idea of 4 upcoming rate hikes in 2016.
Going forward, we expect the markets to continue to be volatile. We have adjusted several of our strategies to work near their minimum volatility settings, which means that we try to hedge risk using treasuries and stay on the safer side of the market.
From Logical Invest, February 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: 1/30/2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| MYRS | 602.13 | 7.04 | 1.68 | 7.04 | 2.22 | 26.83 | 0.41 | 0.38 | -0.23 | 1.20 | |
| TLT | 127.30 | 5.57 | 3.46 | 5.57 | 0.85 | 12.65 | -0.30 | 1.68 | -0.37 | 0.64 | |
| GOLD-USD | 274.34 | 3.00 | 0.61 | 3.00 | 1.18 | 7.33 | 0.19 | 0.47 | 0.71 | 1.51 | |
| BRS | 252.23 | 2.20 | -0.19 | 2.20 | 0.46 | 5.84 | 0.36 | -0.19 | -0.55 | 1.74 | |
| GSRLV | 481.02 | 1.34 | -1.33 | 1.34 | 1.76 | 9.15 | 0.72 | -0.79 | -0.48 | 1.29 | |
| AGG | 109.35 | 1.24 | 0.49 | 1.24 | 0.29 | 3.16 | -0.06 | 0.89 | 0.01 | 0.90 | |
| UIS-SPXL-TMF | 5090.62 | 1.03 | -6.50 | 1.03 | 4.31 | 26.47 | 0.59 | -1.19 | -0.79 | 1.90 | |
| UIS | 463.16 | 0.30 | -1.47 | 0.30 | 1.59 | 9.34 | 0.68 | -0.85 | -0.37 | 1.98 | |
| BUGLEV | 268.02 | 0.00 | -0.87 | 0.00 | 0.00 | 3.80 | 0.66 | -1.26 | -1.36 | 1.03 | |
| WORLD-TOP4 | 262.07 | -1.21 | -5.97 | -1.21 | 1.51 | 13.10 | 0.63 | -2.20 | -0.88 | 2.18 | |
| BUGST | 205.39 | -1.25 | -2.12 | -1.25 | 0.62 | 4.91 | 0.98 | -2.25 | -1.80 | 1.12 | |
| GMRS | 3730.46 | -1.27 | -8.56 | -1.27 | 2.59 | 19.59 | 0.81 | -1.98 | -1.36 | 0.38 | |
| SPY | 193.72 | -4.98 | -6.74 | -4.98 | 2.44 | 17.50 | 1.00 | -1.86 | -0.19 | 1.24 | |
| NASDAQ 100 | 933.93 | -6.18 | -0.54 | -6.18 | 3.94 | 19.40 | 0.76 | -0.15 | 0.39 | 2.68 |
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)