Another bad week for most Investment Groups. Major indices over the world dropped, with hard hits in Europe. The Investment Groups that have most of their investments in the US and China are leading the Flow Traders Investment Competition.
European equities took big hits last week, as the AEX decreased more than 2% and the Eurostoxx 200 Large more than 1%. The result was that most Investment Groups followed the indices and lost their returns. In fact, of the started Investment Groups over 75% is having a loss. Time for them to start spending more time at the B&R Beurs Academies.
Borsa Valori has taken over the number one spot of the Flow Traders Investment Competition from CFQ. Borsa Valori showed stable progress with Asian investments, while CFQ took a hit on their Dutch investments. Meanwhile, Midas is closing the gap and climbed 24 spots last week. They will be looking to challenge Borsa Valori in the upcoming weeks for that favored number one spot.
Keith Black mentioned it last Thursday; this year will be the most important year for value investors. Correlations were high in the last few years, but due to highly valued equity markets and political changes, the value investors will need to prove their worth in the upcoming year. Take health care stocks as example. Roughly half of them moved up this year, while the other half decreased. Although ETF investors hate these moments, value investors should love them. Their job is figure out which specific stocks to buy and which ones to sell.
For the Investment Groups that think we are on the edge of a bear market, there was an important message as well. Investors ‘flee to quality’ during bear markets, making safely rated (government) debt and gold rise in value. Another possibility would be Managed Futures. Managed Futures are investment managers known as Commodity Trading Advisors or CTAs. Their managers are checked by the FBI and NFA to gain their certificate. These managers use trading systems to go long or short in futures related to commodities, equities, bonds and currencies.
The most important part of the Managed Futures is that you can invest in them too and they lower risk substantially. Their negative positive return during bear markets makes them one of the best diversifiers. You can invest in two available funds at DeGiro: Wisdomtree Managed Futures Strategy Fund and ProShares Managed Futures Strategy ETF.
May the returns be with you!
Written by Paul Hendriks