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A. Stotz All Weather Strategies – August 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 August 2024

Performance of the World stock markets

  • US stocks rebounded strongly
  • Japan fell
  • China A-shares fell, while Hong Kong rebounded strongly
  • And Europe was up

Find the updated Performance of the World stock markets here.

World Equity continued up in August

  • In 2024YTD, global stocks gained 16.3%
  • Expectations of looming rate cuts continued to support equity

Global Bonds rose in August 2024

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

Commodities fell in August 2024

  • Energy was the main drag in August

WTI oil closed Aug 2024 at US$77/bbl

  • Demand has softened, while supply remains good

Metals gained in August 2024

Gold was the best performer in August

  • Gold closed the month at US$2,503/oz t
  • Gold gained on risks of escalation in the Israel-Palestine war and expected Fed rate cuts

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

  • Typically, a stronger US$ means a lower gold price in US$ and vice versa
  • The US$ weakened the most against gold in August 2024

Fed keeps rate unchanged

Brief crash in crypto and Japan

US adds unproductive debt

  • Debt can be beneficial if it drives growth
  • Private sector debt generally generates more than US$1 in GDP for every US$1 in debt
  • But each US$1 of Gov’t debt increased GDP by only US$0.6

US Producer Price Index (PPI) falls to 2.2%, the lowest since March 2024

Buffett has a record cash pile

  • Berkshire Hathaway’s cash, cash equivalents, and short-term Treasuries spiked to a new all-time high of US$277bn in 2Q24

Chinese home prices saw the largest decline in history last month

China sees equity outflows

  • China is on track for its first-ever annual outflow from equities by foreign investors
  • The country decided to solve the problem by stopping publishing the funds flow data

Gold hits another all-time high

Performance review: All Weather Inflation Guard

All Weather Inflation Guard gained 0.6%

Since inception, the strategy was up 8.7% and 5.2% above a 40/60 portfolio

  • The strategy has also experienced less volatility

In August 2024, the strategy was up 0.6%, which was 1.1% below the 40/60 portfolio

  • Global Bonds were strong in August
  • Our 10% allocation to Gold did great
  • Our 5% target allocations to World Energy did poorly

Performance review: All Weather Strategy

All Weather Strategy was flat

Since inception, the strategy was up 45.5% and 15.4% above a 60/40 portfolio

In August 2024, the strategy was flat, which was 1.6% below the 60/40 portfolio

  • Our 25% target allocations to Gold and Developed Europe did well, while our 25% target allocations to APAC ex JP, CN dragged on performance
  • Japan and China dragged as well

Performance review: All Weather Alpha Focus

All Weather Alpha Focus gained 1.9%

Since inception, the strategy was up 4.2% and 6.4% above a 60/40 portfolio

And 1.2% 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 rose

In August 2024, the strategy was up 1.9%, which was 0.3% above with the 60/40 portfolio

  • Our big tilts to Healthcare,  Infrastructure, Gold, Global Bonds did well
  • The main drags on the performance were the World Equity fund and the 3% allocation to World Energy

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