Our top 2017 investment strategies, year-to-date:
- The Maximum Yield strategy with 47.47% return.
- The Leveraged Universal strategy with 31.15% return.
- The NASDAQ 100 strategy with 24.65% return.
SPY, the S&P500 ETF, returned 11.74%.
After more than three months of extremely low levels of volatility, VIX spiked on August 10th peaking at the 16.04 level. The index has now dropped around the 10 – 11 level awaiting further possible market disruptions. The move has triggered an upward reaction to traditional safe heavens assets with TLT (Treasury ETF) returning 3.41% and GLD (Gold ETF) 4.2%, for the month. This has benefited our strategies since a majority of them use these assets as a hedge.
For September, the upcoming U.S. Congress needs to agree on a budget for fiscal year 2018 and raise, once again, the so-called debt ceiling, The Federal Reserve may start a large winding down of its crisis-era balance sheet while the European Central Bank is considering scaling back its asset purchases. Tensions between N. Korea and the U.S. may escalate. All these factors could cause VIX to spike.
As mentioned in the previous newsletters, the dollar index continues to show weakness, benefiting foreign (non-U.S.) equity and emerging market bonds. The Euro continues to show some strength. Gold has been showing strength in 2017 after reaching a low on December 2016.
Our best strategy performers for August are:
The Nasdaq 100 strategy, recovered from last month’s correction adding +4.56 %. The Bug Leveraged strategy added +3.54% to reach a very respectable 11.10% year-to-date. Our 3x Universal Investment strategy returned 3.17% for the month. The Gold-USD strategy made a 2.32% profit and finally turned positive for 2017.
The performance of the Bug Leveraged strategy was due to holding full (leveraged) positions in ‘safer’ assets: GLD (+4.2%), TLT (+3.4%) and PCY (2.18%). Our flagship volatility strategy, the Maximum Investment strategy managed to stay positive despite the August 10 36% rise in the VIX level. The strategy over-weighted the TMF hedge for the second half of the month (which returned +6.38% and was weighted @60% of portfolio) neutralizing any ZIV losses.
Lastly, it may be worth mentioning the continuing strength of Bitcoin and the largest alt-coins (Ethereum, Monero, ZCash, etc) as the continuation of ICO’s (Initial Coin Offerings) continue to draw hundred of millions of venture capital into promising but unproven and yet-to-be profitable companies. These alternative markets are rising in such parabolic fashion that are starting to remind us of the late ’90s tech exuberance.
We wish you a healthy and prosperous 2017.
Logical Invest, September 1, 2017
Strategy performance overview:
Visit our site for daily updated performance tables.
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)