February 2022
February 2022 Deck
Feb 28, 2022
The strategies were correct in calling a switch out of Equities and into Treasuries for February 2022 in so far as Treasuries outperformed Equities, however, the "win" is muted by the fact that Treasuries still returned a negative return for the month. It would seem that for February the rising Treasury yields outweighed the "Safety Trade" into Treasuries.
The full reporting deck with Month and YTD returns through February 2022 as well as March 2022 results can be downloaded in the reporting deck here.
The full reporting deck with Month and YTD returns through February 2022 as well as March 2022 results can be downloaded in the reporting deck here.
Comments
January 2022 Deck
Feb 01, 2022
The markets have had two very strong days in a row, one of the investors in DMS strategies wrote me this afternoon, replying to the email I sent yesterday in which I said I will follow the strategies, if they say Treasuries then I will go Treasuries. He commented today that while the markets may not have gone up quite enough to keep the strategies in equities - he is, and making a deviation to the strategy signals and staying in equities.
I mention this, because I understand that it can be difficult for people to follow the signals because of the circumstances. I got curious and went back and looked from 1980 through 2021 at every 1st month the LT Gain 2X strategy went into TLT but filtered it when the weighted lookback was less between -1.5% and 0% as it is at the end of January 2022. The results are that you would have been much better off going to Treasuries instead of staying in the market. The past events do not give us certainly to February 2022, only that in the past we would have been better sticking to the signal.
I trust the strategy signals better than my gut, and quite honestly I am ambivalent about February 2022 market performance, I have no idea what February may hold for equity performance one way or the other. We have earnings still being released, the Fed is raising rates soon and I don’t know those and other factors will ultimately be digested by Mr Market.
However you position yourself for February, I wish you the best outcome! I’ll be following the strategies, my wife tells me I am so literal - maybe so.
The full deck can be downloaded here.
I mention this, because I understand that it can be difficult for people to follow the signals because of the circumstances. I got curious and went back and looked from 1980 through 2021 at every 1st month the LT Gain 2X strategy went into TLT but filtered it when the weighted lookback was less between -1.5% and 0% as it is at the end of January 2022. The results are that you would have been much better off going to Treasuries instead of staying in the market. The past events do not give us certainly to February 2022, only that in the past we would have been better sticking to the signal.
I trust the strategy signals better than my gut, and quite honestly I am ambivalent about February 2022 market performance, I have no idea what February may hold for equity performance one way or the other. We have earnings still being released, the Fed is raising rates soon and I don’t know those and other factors will ultimately be digested by Mr Market.
However you position yourself for February, I wish you the best outcome! I’ll be following the strategies, my wife tells me I am so literal - maybe so.
The full deck can be downloaded here.