Even though the stock market appears to be moving on from the banking crisis, the bond market was never fooled. The inverted yield curves suggested something bad was likely to happen and now that the curves are steepening, they are indicating a recession, despite what the equity markets indicate, is nearly a sure thing. The … Read more

Jeff and I continue to believe that stocks are likely to rally over the next several months as the stock market historically moves based on the anticipated direction of the Federal Funds Rate rather than the underlying economic fundamentals. Our base case remains that stocks are likely to go higher when the market believes the … Read more

Jeff and I believe that stocks and long-term bonds are likely to rally over the next several months especially if the market believes the Fed is soon to stop raising the Federal Funds Rate. Portfolio Shield™ is currently positioned to take advantage of a rally in stocks and a decline in interest rates. Our view … Read more

Jeff and I continue to believe the most likely path is a rally in stocks and longer-term bonds over the next several months, especially should the Fed slow the pace of rate hikes. We will know more on February 1 when the Federal Open Market Committee announces its latest policy statement. Portfolio Shield™ is positioned … Read more

Last month Portfolio Shield™ removed its bond hedge and Jeff and I both agreed to remove the additional downside hedging on the equity funds to allow the strategy to run with the Bulls. At the same time, we implemented an additional momentum overlay on the bond allocation which added a position in high-yield bonds. We … Read more

After putting in a strong performance for September, Portfolio Shield™ began hedging further downside risk into October. A late October stock rally and a further decline in bonds saw the strategy give back some of its hard-earned gains from the prior month. Early-stage Bear markets are very difficult for momentum strategies. Momentum strategies perform optimally … Read more

Looking back over the last month, Portfolio Shield™ performed very well relative to the broad market. The additional downside convexity in the Simplify ETFs added excess Alpha to the returns by reducing the downside move in the equity market. I recently spoke with Paul Kim, the CEO, and co-founder of Simplify to get an update … Read more

Looking back over the last month, Portfolio Shield™ correctly identified that momentum was on the side of equities and dropped its bond hedge for August. While both stocks and bonds were down the last month, stocks were down the least. The Bear market rally that started in mid-July appears to have ended in mid-August. When … Read more

The good news is all models rose in July. However, as I mentioned in last month’s note and prior month’s notes, should equities rally we would lag to the upside due to the strategy’s dual hedging. And we did. Due to the relative outperformance of equities in July and over the lookback period, the strategy … Read more

Last month I wrote that it appeared we were at the beginning stage of a big Bear market rally. Investors and money managers were extremely bullish, and money poured into stocks. After a brief move higher, stocks reversed direction and headed lower. Not even quarter-end rebalancing and a flood of corporate share buybacks before the … Read more