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A. Stotz All Weather Strategies – September 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 September 2024

Performance of the World stock markets

  • US was up; the tech-heavy NASDAQ was up the most
  • Japan fell
  • China saw a record rebound; all of it in the last week of the month
  • Europe was down

Find the updated Performance of the World stock markets here.

World Equity continued up in September

  • In 2024YTD, global stocks gained 19.1%
  • Expectations of more rate cuts drove equity

Global Bonds rose in September

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

Commodities fell slightly in September 2024 due to poor Energy performance

  • We had no target allocation to Commodities

WTI oil closed September at US$69/bbl

  • Demand appears to have stagnated, while supply remains good

Energy was the only negative in September 2024

  • Other Commodities did well as the global outlook improved on the back of lower rates in the US and EU and stimulus in China

Gold was the best performer in September

  • Gold closed the month at US$2,634/oz t
  • Gold set new ATHs due to escalations in the Israel-Palestine war and weaker US$

All currencies have weakened >20% against Gold in 2024YTD

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

German production is down

  • German industrial production has fallen about 16% since peaking in 2017 and is 26% below its pre-pandemic trend

US labor market is worsening

  • US job openings fell in July to the lowest since the start of 2021, and layoffs rose

Fed cut 0.5%

  • The US central bank decided to cut 0.5%, which is considered aggressive
  • It might be necessary to reduce the US government debt servicing costs

US$ weakens further

  • The US$ continued to weaken as the Fed cut the policy rate
  • The weakening had already started as the market expected a weaker US economy and at least a 0.25% cut by the Fed

Gold hits ATH again

  • Gold made new all-time highs in four consecutive trading sessions
  • The yellow metal set a new ATH above US$2,600 oz/t

Performance review: All Weather Inflation Guard

All Weather Inflation Guard fell 0.1%

Since inception, the strategy was up 8.6% and 4.5% above a 40/60 portfolio

  • The strategy has also experienced less volatility

In September 2024, the strategy was down 0.1%, which was 0.9% below the 40/60 portfolio

  • Global Bonds gained 0.9% in September
  • Our 5% allocations to Gold and REIT did great
  • Our World Equity fund underperformed, which dragged on performance

Performance review: All Weather Strategy

All Weather Strategy gained 1.6%

Since inception, the strategy was up 48.1% and 16.5% above a 60/40 portfolio

In September 2024, the strategy was up 1.6%, which was 0.4% above the 60/40 portfolio

  • Our 25% target allocation to Gold did great
  • Our 25% allocations to US equity and Global Bonds did OK
  • Our 5% allocation to China jumped 20%+!

Performance review: All Weather Alpha Focus

All Weather Alpha Focus fell 0.4%

Since inception, the strategy was up 3.8% and 4.9% above a 60/40 portfolio

And 3.1% 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 September 2024, the strategy was down 0.4%, which was 1.6% below the 60/40 portfolio

  • Our big tilts to Gold and Infrastructure did well
  • Our tilt to Global Bonds did OK, while our tilt to World Healthcare dragged on performance
  • Our World Equity fund underperformed, which dragged on performance

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