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A. Stotz All Weather Strategies – February 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 February 2024

Performance of the World stock markets

  • The US, and especially tech-heavy NASDAQ saw great performance
  • Japan continued strongly as well
  • China A and Hong Kong saw a strong rebound
  • Europe was up too

Find the updated Performance of the World stock markets here.

World stocks continued to rise in February 2024

  • In 2023, World stocks were up 22.8%
  • In 2024YTD, they’ve gained 5.0%
  • Falling inflation across developed markets and expectations of peak interest rates continued to support stocks

Global bonds fell in February 2024

  • Expectations that rate cuts won’t come in 1Q24 in the US and EU led to higher bond yields, which means bond prices fell (as yields and prices move in opposite directions)

Commodities continued up in February

  • Though the commodities fund the strategy uses was down 2.2%, much due to its lower weight in Energy and higher weight in soft commodities

WTI oil closed February 2024 at US$79/bbl

  • Ongoing conflicts related to Gaza, i.e., US-Iran proxy war, held up oil prices

Livestock and Energy drove up commodities in February 2024

Gold fell 0.4% in February 2024

  • Gold closed the month at US$2,034/oz
  • Expectations about delay in rate cuts by the Fed led to weaker gold price (as it strengthens US$ and high real rates make gold less attractive)

Only US$ and GBP have held up against gold in 2024YTD

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

US inflation higher than expected

  • US CPI slowed less than expected in January 2024, which resulted in a big spike in bond yields

NVIDIA becomes 3rd largest US stock

Investors remain bullish

  • Goldman Sach’s client poll finds that 44% are slightly bullish or bullish

Sh*tcoin or Real estate?

  • Canada, Australia, New Zealand, and the UK have seen massive surges in real estate prices

While the rest of the world is battling inflation, China is fighting deflation

India gets China money

BlackRock’s Bitcoin ETF hits US$10bn in AUM

  • Given the ETF inflows into BlackRock’s and nine other new Bitcoin ETFs, BTC closed February 2024 above US$60,000

Key takeaways

  • US inflation higher than expected
  • NVIDIA becomes 3rd largest US stock
  • Investors remain bullish
  • While the rest of the world is battling inflation, China is fighting deflation
  • India gets China money
  • BlackRock’s Bitcoin ETF hits US$10bn in AUM

Performance review: All Weather Inflation Guard

All Weather Inflation Guard gained 0.5%

Since inception, the strategy was up 5.6% and 6.7% above a 40/60 portfolio

  • The strategy has also experienced less volatility

In February 2024, the strategy was up 0.5%, which was 0.3% below the 40/60 portfolio

  • The World equity fund continued to outperform the MSCI AC World index
  • Our 5% target allocation to World IT also did well
  • Global bonds, gold, and TIPS dragged on performance

Performance review: All Weather Strategy

All Weather Strategy gained 3.9%

Since inception, the strategy was up 40.0% and 16.5% above a 60/40 portfolio

In February 2024, the strategy was up 3.9%, which was 2.1% above the 60/40 portfolio

  • Our 25% target allocations to Developed Europe, Japan, and the US were the top performers

Performance review: All Weather Alpha Focus

All Weather Alpha Focus gained 3.1%

Since inception, the strategy was down 2.9% but 4.4% above a 60/40 portfolio

And 0.7% below World equity, but with a lot less volatility

In February 2024, the strategy was up 3.1%, which was 1.2% above the 60/40 portfolio

  • The strategy was 1.1% below World equity
  • Our 22% tilts to World Info. Tech., World Energy, and Europe Small Cap underperformed World equity to various degrees

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