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A. Stotz All Weather Strategies – July 2024

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The All Weather Strategy is available in Thailand through FINNOMENA. If you’re interested in our allocation strategy, you can also join the Become a Better Investor Community. Please note that this post is not investment advice and should not be seen as recommendations. Also, remember that backtested or past performance is not a reliable indicator of future performance.

What happened in world markets in July 2024

Performance of the World stock markets

  • The tech-heavy NASDAQ lost, while the broader NYSE was up
  • Japan fell slightly
  • China fell too
  • And Europe was up slightly

Find the updated Performance of the World stock markets here.

World Equity continued up in July

  • In 2024YTD, global stocks gained 13.4%
  • Expectations of looming rate cuts continued to support equity

Global Bonds rose in July

  • Expectations about rate cuts in the US and the EU supported Global Bonds

Commodities fell in July 2024

  • Besides precious metals, most commodity groups fell due to expectations about economic slowdown

WTI oil closed Jul 2024 at US$79/bbl

  • Demand appears to have stagnated, while supply remains good

Precious metals was the main positive in July 2024

  • Other Commodities fell on worsening economic outlook

Gold was the best performer in July

  • Gold closed the month at US$2,448/oz t
  • Gold gained on risks of escalation in the Israel-Palestine war

All currencies have weakened >15% against Gold in 2024YTD

  • Typically, a stronger US$ means a lower gold price in US$ and vice versa

EU inflation came in above expectations

Fed keeps rate unchanged

  • At the latest FOMC meeting on July 31, the Fed kept the fed funds rate unchanged at 5.25-5.50%

The AI boom comes into question

  • Sequoia published an article that argues the tech industry needs to generate US$600bn in AI revenue to justify the money spent on GPUs and data centers
  • There’s still a long way to go to reach that

Few stocks are propping up the S&P 500

  • Only 25% of S&P500 stocks are beating that index

Remember, stocks have historically been the best hedge against inflation

Performance review: All Weather Inflation Guard

All Weather Inflation Guard gained 1.0%

Since inception, the strategy was up 8.1% and 6.3% above a 40/60 portfolio

  • The strategy has also experienced less volatility

In July 2024, the strategy was up 1.0%, which was 0.6% below the 40/60 portfolio

  • Global Bonds rebounded strongly in July
  • Our 10% allocation to Gold did great
  • Our 5% target allocations to World Energy and Commodities did poorly

Performance review: All Weather Strategy

All Weather Strategy gained 0.2%

Since inception, the strategy was up 45.5% and 17.5% above a 60/40 portfolio

In July 2024, the strategy was up 0.2%, which was 1.3% below the 60/40 portfolio

  • Our 25% target allocation to Gold did great
  • While our 25% target allocations to Developed Europe and APAC ex JP, CN dragged on performance

Performance review: All Weather Alpha Focus

All Weather Alpha Focus gained 1.6%

Since inception, the strategy was up 2.2% and 6.0% above a 60/40 portfolio

And 1.4% below World Equity, but with a lot less volatility

  • We have reduced our equity allocation to 68%, which leads to a lag as World Equity rise

In July 2024, the strategy was up 1.6%, which was 0.1% above the 60/40 portfolio

  • Our big tilts to World Infrastructure, Gold, Global Bonds, and World Healthcare outperformed
  • The main drag on the performance was the World Equity fund

DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

Posted in All Weather Strategy