As is typical in this world of speculation and just like a Francis Ford Coppola thriller, just when you want to get out……it pulls you back in.Here we were in February deep in the doldrums with not a breeze about….and then in March we go straight into the roaring forties. The Trend Following index (TF Index) was able to claw back the building drawdowns from January and February to bring the YTD calendar period to a break-even result.
“Day after day, day after day, We stuck, nor breath, nor motion; As idle as a painted ship Upon a painted ocean”
I wish I could bring you good news for the month….but the hard slog continues in the diversified systematic trend following/ momentum camp. Not to say that there weren’t some solid performances in the group, but the index as a whole took another nose dive retreating a further 2.81% into the red for the month. This brings the current drawdown for the Index to 13.18% which still has a way to go to reach max drawdown levels of 15.83% reached in September 2013, but still……..let’s be honest……we are having a difficult trot at the moment.
Fund Performance Report – 31 December 2018 – “Oh well….that was exhausting – What will I tell the wife? “
Well thank heavens that 2018 is over. There were ups… downs….whipsaws….phantom bonanzas….you name it. That is as much as I would like to say about it in general….but the point I would like to make for 2018 is …..does a year really matter in the context of my heady aspirations of wealth building while swinging in this hammock?
While offering nothing to crow about, a flat return from the systematic trend following funds for the month is certainly a welcome result considering equities represented by the S&P500 TR Index (Total Return) plummeted 7.7% in November which added to the pain of Septembers plunge bringing the S&P500 TR Index to a 12.2% drawdown from it’s equity high in August 2018.
October 2018 has tested the resolve of trend followers where we have suffered a similar fate to February 2018 and have witnessed a fairly nasty whipsaw in Energy, Fixed Income and Equity markets. Given that we had just caught the waves of September’s volatility surge….all our hopes for the emergence of some good enduring swells in our direction were shattered as mean reversion started to enter the mix as markets rebounded sharply from their maximum adverse excursions resulting in some crazy double-up formations and some spectacular wipe-outs.