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A. Stotz All Weather Strategies – June 2024

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 June 2024

Performance of the World stock markets

  • The tech-heavy NASDAQ index performed great
  • Japan was up too
  • China did poorly
  • And Europe fell as well

Find the updated Performance of the World stock markets here.

World Equity continued up in June

  • In 2023, World stocks were up 22.8%
  • In 2024YTD, global stocks gained 11.6%
  • Expectations of rate cuts in 2H24 supported stocks in June 2024
  • The Info Tech sector was a key driver

Global Bonds rose slightly in June

  • Expectations about rate cuts in 2H24 in the US and EU supported global Bonds

Commodities rebounded in June 2024

WTI oil closed Jun 2024 at US$83/bbl

  • Expectations of falling inventories in the West led to a rise in oil price

Energy was the main driver of Commodities in June 2024

Gold dropped slightly in June 2024

  • Gold closed the month at US$2,326/oz
  • The Gold price consolidated as the news was mixed in June

All currencies have weakened >10% against Gold in 2024YTD

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

US retail sales are weak

  • US Retail Sales increased 2% over the last year, but after adjusting for higher prices, they were down 1.2%
  • The US consumer appears to be pulling back

Fed keeps rate unchanged at 5.25%-5.50%

  • New dot plots show one rate cut in 2024 (earlier this year, it was three)

Foreigners hold less US debt by half

  • The share of US Treasuries owned by foreigners has massively declined
  • Given the amount of new debt the US issues, this will likely become a problem

China dumps US Treasuries for Gold

  • China has been buying Gold and selling US Treasuries in the past decade

Buffett likes US Treasuries, though

A house might not be the investment it once was

  • Buying a house or an apartment has been a great investment in many Asian and European countries
  • However, with collapsing demographics, one should probably not extrapolate this trend

Canada’s real estate bubble is massive

  • In the 1990s, Japan’s massive real estate bubble popped, and it still hasn’t recovered
  • It’s known as one of the largest real estate bubbles ever
  • Canada is twice as big!

Performance review: All Weather Inflation Guard

All Weather Inflation Guard gained 0.3%

Since inception, the strategy was up 7.1% and 6.9% above a 40/60 portfolio

  • The strategy has also experienced less volatility

In June 2024, the strategy was up 0.3%, which was 0.6% below the 40/60 portfolio

  • Our 5% target allocations to World Energy and Commodities did poorly
  • Our 10% target allocation to TIPS outperformed Global Bonds

Performance review: All Weather Strategy

All Weather Strategy gained 0.2%

Since inception, the strategy was up 45.2% and 19.1% above a 60/40 portfolio

In June 2024, the strategy was up 0.2%, which was 0.8% below the 60/40 portfolio

  • Our 25% target allocation to APAC ex JP, CN did great
  • While our 25% target allocations to Gold and Developed Europe dragged on performance relative to the 60/40 portfolio

Performance review: All Weather Alpha Focus

All Weather Alpha Focus gained 0.6%

Since inception, the strategy was up 0.6% and 5.8% above a 60/40 portfolio

And 1.9% 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 performs well

In June 2024, the strategy was up 0.6%, which was 0.4% below the 60/40 portfolio

  • Our 17% tilt to World Healthcare outperformed but our 17% tilt to World Infrastructure offset most of that gain
  • Our tilts to Gold and Global Bonds 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.