The Logical-Invest monthly newsletter for October 2018

Home » Blog » Newsletter » The Logical-Invest monthly newsletter for October 2018

Logical Invest
Investment Outlook
October 2018

Our top 2018 investment strategies, year-to-date :

SPY, the S&P500 ETF, returned +10.37%.

Market comment:

We are continuing to experience the symptoms of the end of Quantitative Easing: Higher interest rates and slightly higher inflation. The FED is normalizing policy and it seems that moderate growth and low inflation have helped make this into a controlled, gradual process. This is all good news, but it brings a side effect: As foreign investors move money into higher yielding Treasuries, the dollar rises. Much like 2015, any dollar-denominated asset has benefited while everything else, including emerging markets and gold, have lost value. Tactical Allocation strategies (TAA’s) tend to suffer in this environment as their main promise is diversification across assets and geographical locations. TAA’s are risk controlling entities and although they will outperform in the long run, they do poorly in a straight dollar run.

We are now moving along the longest bull run in the history of the U.S. market. We are also close to an inverted yield curve, which to many is a red flag. It feels like an immenent correction may come and destroy what we have built these past years. And yet we are at a favorable point seasonally. Not only are November and December good months to invest but we are at the end of a mid-term elections year which in the past had brought additional returns.

The point is we don’t really know what will happen. After 10 years of 0% policy, ‘easy money’ and straight gains we are entering a new era. Borrowing is no longer free. One could argue that this will lead to a re-pricing of assets, worldwide. Which in turn is an argument against passive investing but in favor of active, flexible management that can adapt to a changing market.

The best performing strategy for September was the GLD-USD strategy. Although gold lost 0.66% for the month, the strategy benefitted from being ‘short Yen’ (ETF” YCS +4.93%) and came out positive at +2.33%. The U.S. sector strategy returned +1.16%. Our Bond Rotation remain flat while most other strategies came in negative, mainly due to Treasury (TLT -2.86%) and foreign equity weakness.

We wish you a healthy and prosperous 2018.

Logical Invest, October 1, 2018

Strategy performance overview:

 

Logical Invest Strategy Performance October 2018

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 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)

2018-09-29T14:30:46+00:00By |0 Comments

About the Author:

Vangelis has been involved in quantitative research and development since 2007. He blogs under the 'Sanz Prophet' alias. He has built, run and tested literally thousands of trading systems using Matlab, Python, C#, QuantShare and Amibroker and has contributed as a researcher/programmer in academic papers. His quantitative blog has been part of the “Whole Street” quant blog aggregator since inception. He holds a B.A. in Economics & Theater Arts from Cornell University and an M.F.A. in Motion Picture Producing from the Peter Stark Program at the University of Southern California. Before entering the financial world Vangelis worked as a film and commercial director and collaborated with agencies such as Bold Oglivy, Adel Saatchi and Saatchi and clients including Pepsico, P. & G., Hyundai and others.

Leave A Comment