Logical Invest
Investment Outlook
November 2015
September and October have traditionally been the most volatile months of the year. This year was no exception. Investors were shaken by sharp declines in the equity markets as volatility returned with a vengeance. The simultaneous fall in equities, bonds, commodities and foreign currencies have left a lot of portfolios with flat or negative returns for the year. Many investors are now wondering on how to move forward.
Students of historical data and seasonality know that these two months often present the best opportunity for investors to enter the market and the worst time to exit.
This October, equities recovered and so have most of our strategies. MYRS returned 9% for the month while our new Nasdaq 100 come in at 5.72%. World4, GSRLV and GMRSE averaged a 2% monthly return while our most conservative BUGs chose to stay in cash and bonds and remained mostly flat.
Strange as it may sound, the equity markets are behaving in a somewhat predictable pattern. Both the after-summer increased volatility as well as signs of recovery into November are in line with seasonal tendencies. If this continues and the market follows it’s decade long seasonality bias, November and December could be the best months of the year.
Both the World 4 and the new Nasdaq 100 strategies provide good exposure to equities and are the recommended vehicles to use for a strong end-of-year recovery. For more conservative, multi asset portfolios, we note that the BUG strategy is currently sitting in 80% cash. This presents a rare opportunity to enter these strategies with minimal risk and with a long term view to participate into a future Gold, foreign bonds or foreign equity bull market.
Either way, we believe this is not a bad time to be in the markets. We, are after all, approaching a pre-election year, a time that has historically provided better than normal returns for investors.
Logical Invest, November 2015
Strategy performance overview:
| Symbol | close | year % | 3m % | month % | day % | 60 day vola | 60 day corr | 3 month sharpe | 12 month sharpe | 36 month sharpe |
|---|---|---|---|---|---|---|---|---|---|---|
| _META-NASDAQ100BALANCED | 3640.7399 | 11.5477 | -0.6595 | 5.7208 | -0.3023 | 17.7322 | 0.8927 | -0.2090 | 1.7636 | 3.4048 |
| _WORLD-TOP4 | 278.0399 | 4.3292 | -4.1585 | 2.6419 | 0.9445 | 11.8729 | 0.4363 | -1.7741 | 2.4486 | 2.7023 |
| SPY | 207.9300 | 2.6397 | -0.3427 | 8.5286 | -0.4310 | 20.4602 | 1.0000 | -0.0922 | 0.6344 | 1.9197 |
| _UIS | 465.4212 | 1.4550 | -2.3669 | 1.2136 | 0.4983 | 16.2474 | 0.2845 | -0.7650 | 0.8483 | 2.0879 |
| _GSRLV | 483.7806 | 1.3406 | -3.0890 | 2.2250 | 0.2618 | 10.0435 | 0.7577 | -1.6226 | 0.8802 | 1.8372 |
| _BRS | 250.5885 | 0.9873 | 1.2502 | 1.0664 | 0.1652 | 7.6825 | -0.0388 | 0.9583 | 0.5019 | 2.1404 |
| AGG | 109.4500 | 0.8779 | 0.2409 | -0.1186 | 0.2657 | 3.4301 | -0.4490 | 0.4010 | 0.6537 | 0.7146 |
| _MYRS | 582.6941 | -0.5029 | -12.3183 | 8.8154 | 0.0026 | 27.4403 | 0.5073 | -1.8751 | 0.4041 | 1.9967 |
| TLT | 122.7800 | -0.8407 | -0.4075 | -0.6152 | 0.7550 | 14.0810 | -0.5397 | -0.1635 | 0.4887 | 0.3047 |
| _GMRS | 4046.1608 | -3.0607 | -0.8399 | 2.1714 | 0.7545 | 19.0519 | 0.1181 | -0.2538 | 0.3010 | 1.0863 |
| _UIS-SPXL-TMF | 5312.9882 | -3.7908 | -12.6144 | 3.9837 | 1.1699 | 41.7710 | 0.5814 | -1.2632 | 0.4886 | 2.0892 |
| _BUGST | 209.3866 | -4.0815 | -2.6563 | -0.1230 | 0.1493 | 5.8637 | 0.6151 | -2.4074 | -0.4350 | 1.5181 |
| _BUGLEV | 269.6101 | -4.6378 | -3.2405 | -0.1820 | 0.1869 | 7.6267 | 0.6204 | -2.2295 | -0.5438 | 1.2316 |
| _GMRSE | 5317.2953 | -12.9499 | -17.2398 | 2.1714 | 0.7545 | 27.7885 | 0.2702 | -2.3320 | -0.6408 | 1.1004 |
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
META-NASDAQ100BALANCED – 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)