Friday, April 29, 2016

Model's Performance - Apr 29, 2016

As of right now, April has been a net neutral month. The rally that we saw in the early part of April fizzled out in the last week or so. And now the market is on the verge of closing the month in the negative territory.

However, at the same time, the Portfolio Enhancement Algorithm performed very well in April. Since the beginning of 2016, we are closely tracking the performance of this model. Following chart shows the performance since Jan 2016.

As one can see the model rallied sharply in Jan/Feb, while market declined. Then it consolidated while market rallied sharply in Feb/March. Interesting aspect of this consolidation was that it was not impacted by the sharp rally of the stock market i.e. it was just a consolidation of the gains versus wiping out all the gains.

Soon after the consolidation was complete, the model rallied again. And this time, the rally was followed by a mini consolidation in April. This brings us to today, where the model is breaking out to new highs. So far in 2016, the model is up 12.9% vs SP500 gain of 1.5% (including dividends).

Although the performance of this model is very impressive and its more impressive in the leverage world, which we continue to monitor (we share the results of leveraged model's performance in May/Jun time frame), there are numerous other benefits of this model based portfolio which we have discussed in following posts over the past few weeks:

One another benefit of this model is the ability to implement Buy and Hold Strategy, which we will discuss in the next post along with analyzing the portfolio performance quantitative perspective. 

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