Sunday, August 14, 2016

Market Update and Portfolio Performance

As markets wrap-up another quite week, there is a lot of discussion regarding the next steps of the market. Over the weekend, I have read several articles on the next steps of the market. There is an apparent disconnect between market observers. Some are calling for market to continue its rally, while others regard this market as being extremely over-valued. Few good articles in this regard have been pointed out by the following article (link): 

Main theme are related:

  1. Bollinger Bands tightening
  2. Financial sector break-out
  3. Strength of the overall rally.
According to our proprietary model, stock market entered a new bull phase in July 2016. That was a time when the world was focused on the impact of Brexit. Brexit was supposed to bring the world economy to a halt, and would have shaved several percentage points from the global economy. Many people not only abstained from the market, they even totally exited the markets. Fast forward to today, and the markets are doing very well. SP500 total return index is up 4.32% since June 30th 2016. 

Prior to this correct call, our proprietary Market Classification Model rightly identified change in trend in September 2016. It kept us away from the treacherous markets of H1 2016, which allowed us to invest in other more prolific asset classes.

So far in 2016 (by the grace of God), our proprietary portfolio is performed extremely well with half the volatility risk and amazing Sharp Ratio. Furthermore, this portfolio is constructed in such a way that it minimize the Beta correlation with SP500. Current weighted asset Beta value is 0.35, which means that our model portfolio is nearly completely uncorrelated with the market. Therefore, one should not worry about market/economy risks.

Above chart shows the real-time performance of the model portfolio with real $. This performance is tracked at OpenFolio. The YTD performance values from the brokerage account is +27.6%

As we have mentioned before that we have also been testing an aggressive version of the investment model. We are humbled to share the YTD (7.5 months) results of this model - +57%.

Both of these results, by the grace of Almighty, are amazing and are achieved with minimal risk. In next couple of months, we will share original monthly statements from the brokerage account to share these results. Above all, we continue to enhance our strategies - Our motto is:

"Never Ending Search For Even Better Returns"

Although at this time we are not expecting any investments for these models (we are trying to make that a possibility at some time in future), if your interested, you can subscribe for "Market Classification Model" for now.

A proprietary algorithm that classifies market conditions i.e. Bull market or Bear market. Currently, this model is suggesting a longer-term up-trend for the US Stock Market.

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