![]() ![]() Scroll down to the bottom of the newsletter to see the returns of the model portfolios since inception and a historical performance backtest. Short (or inverse) ETF will return the opposite of the index every day – this causes a rise in the value of the fund in a falling market and allows us to profit in prolonged bear markets. Using leveraged ETF will magnify the daily move of the underlying index by the leverage factor. The aggressive portfolio, for investors who can stomach the risk of drawdowns as high as we have seen in the stock market in the past as well as higher short-term fluctuations, aims for returns that beat the stock market over the long term. The defensive portfolio aims to earn the same return as the stock market, but with only half the maximum losses from the peaks over the long term. ![]() Both portfolios use the same signals, but invest in different exchange traded funds (ETF) that cover broad markets. I run two model portfolios suited either for normal or more aggressive investors. A traffic light model, that judges the health of the economy and the stock market, determines how much of the portfolio is allocated to these risky assets and when to move to safe or alternative assets to protect against the risk of losses.įind out more details about the Meta Strategy here (oder hier auf deutsch). It is invested in stocks by default, because they return more than other financial assets (for example bonds, real estate or commodities) over the long term. The Meta Strategy uses systematic fundamental and technical inputs to gradually rotate a portfolio between different asset classes according to market conditions. Sell 50% Gold ETF (hold 50% Gold) buy 50% S&P 500 ETF Portfolio changes Defensive ETF portfolio You can find all recent editions in the Member Area or the pre-04-2020 newsletter archive, including a FAQ section, here. ![]() Volatility is still elevated and sharp pullbacks may happen at any time coming out of such severe market turbulences. Often gold performs as well as stocks in the early stages after severe economic troubles and the asset will keep us diversified should the economy run into unanticipated problems. Until we get a clearer picture whether the economic recovery is sustainable in the face of increasing Coronavirus infection rates around the world, I will keep half of my portfolio in gold for some time to come and use no leverage in the aggressive ETF portfolio. Our gold position had one of its best months in history (up 13,54%) – far surpassing the gains of the S&P 500 – and I am quite happy to make changes to my long-term portfolio slowly and gradually. During the month the signal was confirmed and we can now carefully buy back into equities. This is quite normal due to the anticipatory nature of the stock market and fundamental economic improvement is lagging behind. The Meta Strategy indicators signaled the change to a bull market regime on July 10th while the world still is in turmoil all around us. ![]()
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