This is one of those rare prolonged periods where the men are sorted from the boys when it comes to holding on to this kind of strategy.
But what is really interesting when you take a moment and look a little bit deeper, the apparent calm expressed by the Index of Fear (VIX) only tells part of the story.
After seven straight months of low readings in the Trend Barometer, August brought a glimmer of hope and what may be in stall for the true believers of trend following.
After a painful drought in Trends, August showed some signs of recovery. Not helped by the news cycle that unfortunately had a busy month with renewed terror in Europe and the Kim/Trump standoff.
Trend following can be quite a challenging utility, return profile, for investors to hold on to. Equities tend to go up, up, up, up, up and then kick you in the teeth and then recover and then go up, up, up. Managed futures have an opposite profile where they tend to make consecutive losses than have a very strong run that makes money. That’s intrinsically quite challenging for investors to hold onto, but it’s really valuable in the portfolio.Read Full Post
As the drought in the Dakotas intensified, so did the drought in trends so far this year…leaving some trend followers close to their worst drawdowns…which typically means that…Better Times are Ahead!Read Full Post
May 17th will be remembered by trend following investors, for the simple reason that it was one of those painful days where trends reversed as a group…with nowhere to hide for trend based strategies.Read Full Post