Skip to content
Learning that drives better investment decisions

A. Stotz All Weather Strategies – January 2025

| |

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 January 2025

Performance of the World stock markets

  • US was strong, but the tech-heavy NASDAQ was weaker
  • Japan was strong too
  • China was mixed; Hong Kong did the best
  • Europe was up more than all the above

Find the updated Performance of the World stock markets here.

World Equity was up 2.6% in January

  • The strategy has a core target allocation of 20%
  • Trump announced AI infrastructure investment plan, eased inflation in the US, and strong reports from luxury companies drove stocks

Global Bonds was up slightly in January

  • The strategy has a core allocation to Global Bonds; the current target allocation is at 45%
  • Eased inflation pressures in the US, and rate cut in the EU supported performance in January 2025

Commodities continued up in January

  • We had no allocation to Commodities

WTI oil closed January at US$73/bbl versus US$72/bbl in December

Commodities were up across the board in January 2025

  • Increased uncertainty following various Trump announcements drove precious metals
  • Soft commodities rose due to adverse weather conditions

Gold gained 6.1% in January 2025

  • We had a 10% target allocation to Gold
  • Gold closed the month at US$2,797/oz t
  • Increased geopolitical uncertainty following Trump’s inauguration led to a rise in the Gold price

All currencies weakened >5% against Gold in January 2025

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

Everyone is bullish on the US

  • S&P 500 to gain 12% in 2025 if you believe in Wall Street analysts
  • Only 3 of 21 analysts forecast <10% return
  • Will it be one of those years that we’re reminded of analysts’ over-optimism?

Worst US bond bear market ever

The Trumps launch memecoins

  • As if his presidency wasn’t divisive enough, the Trumps launched two memecoins, just before Donald Trump’s inauguration

BoJ raises interest rates by 0.25%

  • This move to 0.5% is the highest since 2008

Everyone is bearish on China

  • Short interest in China is still near an all-time high despite Chinese stocks bottoming a year ago

Chinese AI – DeepSeek rattles markets

  • The picture is still not clear, but it appears to be a pretty big breakthrough
  • However, it wasn’t as cheap to build as some claim

Manufacturing to stay in China

  • You can’t get goods out without ports
  • 7 of the 10 biggest container ports in the world are in China
  • And it took China 30 years working at the fastest pace in history to build them

Geopolitical uncertainty pushed up gold

Performance review: All Weather Inflation Guard

All Weather Inflation Guard gained 1.6%

Since inception, the strategy was up 8.9% and 7.9% above a 40/60 portfolio

  • The strategy has also experienced less volatility

In January 2025, the strategy was up 1.6%, which was 0.5% above the 40/60 portfolio

  • Our 10% allocation to Gold and 5% to Financials did great
  • Money Market and Global Bonds were up slightly while TIPS were slightly down
  • Our 5% allocation to Info. Tech. did OK

The strategy has added 7.3% value compared to a 40/60 portfolio since inception

  • The strategy beat a 40/60 portfolio by 1.0% in 2024

Performance review: All Weather Strategy

All Weather Strategy gained 1.4%

Since inception, the strategy was up 48.9% and 19.1% above a 60/40 portfolio

In January 2025, the strategy was up 1.4%, which was 0.3% below the 60/40 portfolio

  • Our 25% allocation to Gold did great, our 25% to US equity dragged relative to World Equity
  • Our 25% allocation to China did poorly

Strong performance compared to a 60/40 portfolio

  • The strategy has had a higher risk-adjusted return than 60/40 except in the past 3 months
  • The strategy beat a 60/40 portfolio by 7.0% in 2024

Performance review: All Weather Alpha Focus

All Weather Alpha Focus gained 3.9%

Since inception, the strategy was up 5.1% and 7.4% above a 60/40 portfolio

And 3.2% below World Equity, but with a lot less volatility

  • We had a moderate equity target allocation at 68%, which led to a lag as World Equity rose

In January 2025, the strategy was up 3.9%, which was 2.2% above the 60/40 portfolio

  • Our big tilt to Precious Metals Miners did great
  • Our big tilt to Info. Tech. did OK, while the Asia Pacific ex Japan underperformed

The strategy has added 5.2% value compared to a 60/40 portfolio since inception

  • The strategy beat a 60/40 portfolio by 3.5% in 2024

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