Performance Report: 04/30/2024
All performance data for our strategies is net of all fees and expenses. All performance data for indexes or other securities is from sources we believe to be reliable. All data is as of 04/30/2024.
Investment Strategy
MAP: Full ($500k+)
MAP: ETP (<150k)
S&P 500 Index2
Balanced (AOM)2
Global Balanced2
Apr. Return
0.5%
(0.2%)
(4.2%)
(3.2%)
(3.3%)
YTD
(0.0%)
(2.2%)
5.6%
0.8%
1.8%
Inception1
40.7%
22.9%
70.9%
17.0%
32.5%
VORR3
.806
.427
.685
.300
.450
We had a respectable month in April with our strategies remaining flat while the stock market, as measured by the S&P 500, fell more than 4%. Further, bonds fell in price as well, having declined in value in two of the last three months. One of the largest bond ETFs, BND, fell 2.4% in April. So far this year, bonds have continued to provide no insurance against stock market declines, just as they have failed to do over the past several years. Anyone in a traditional investment strategy will be seeing quite a bit of red on their monthly statements this month.
While trailing our benchmarks on a YTD basis, we are catching up. Since inception, our risk-adjusted performance figures continue to be well above our benchmarks. One of the reasons we didn't do so well early in the year but have done well the past two months has been our exposure to precious metals and mining stocks. A couple of months ago I wrote the following regarding the performance of precious metal stocks:
Oddly, despite the impressive showing of the world's oldest form of money (i.e. gold), gold mining stocks are deeply out of favor. Newmont (NEM), the only gold miner in the S&P 500, hit a 52-week low just two days before gold closed at an all-time high.
In last month's update, I addressed the multiplier impact on a stock that produces a commodity when the price of a commodity increases:
The consensus says that when a commodity increases in price, the stocks of companies involved in the production of said commodity should increase even faster....Now that gold is trading at an all-time highs, 20% above its average range over the past three years, then gold mining stocks should also be at all-time highs. But that is not the case.
These comments proved to be valid and well-timed as mining stocks saw sizeable gains over the past two months. NEM exploded higher appreciating more than 30% above its 52-week low set in late-February. Other mining stocks we have had exposure to such as AEM, AU, PAAS, and SVM all appreciated between 30 - 40% over the past two months.
Eventually, other commodities will catch up to gold. And then we'll see the stocks linked to these commodities play catch up as well quickly outpacing gains in the rest of the equity markets. There are a considerable number of commodity-based stocks languishing at or near 52-week lows. Stocks like ADM, BHP, MOS, and NTR have been severely beaten down the past several months. Some commodity names, especially in the energy space, have performed better but are still below their all-time highs. In general, commodity-based stocks are out of favor while mainstream investors have piled into richly valued tech names. As the forces of supply and demand cause the prices of commodities to increase, investors will seek out commodity stocks and cause their prices to increase many multiples of the underlying commodity.
As always, please do not hesitate to call me at 512-553-5151 if I can be of assistance.
Best,
Matt McCracken
1) Inception date of 4/30/2019
2) All benchmark prices are obtained through the Yahoo!Finance website. S&P 500 Index is calculated using the index price. AOM is the iShares Core Moderate Allocation ETF. Global Balanced is calculated using a 40% allocation to the S&P 500, a 40% allocation to BND, and a 20% allocation to IEFA.
3) VORR is our "Value over Risk Ratio": Calculated by taking the total return divided by the sum total of all negative months. Ideally, the ratio represents how much loss an investor has to endure to get X gain. A negative RORR score implies there is more risk in the investment than return.
IMPORTANT NOTE: I had to remove the MAP - MIN strategy as there were only 2 accounts invested in it from inception and both accounts are now engaged in a different strategy. Thus I do not have a continuous account history to base since inception returns on.