How was May like for Singapore market?
Singapore stock market tumbled in May as trade talks between US and China broke down, stoking fear of trade war escalation and global recession. In addition Singapore posted disappointing April export data and was recently branded by US Treasury as a currency manipulator. For the month of May, $STI(^STI.IN) fell a whopping 8.31%, erasing most of the gains it made in the past few months. "Sell in May and go away" indeed, as what the system has anticipated in last month's report.
How was the SG portfolio performance in May?
My system's SG portfolio performance in May was slightly better off as compared to STI given that it only fell 4.18%, all thanks to the system's sound portfolio risk management module named MATA (check out the Strategy page to find out how MATA works). Starting early May, the system has scaled down its exposure and increased its cash level to more than 50% as MATA sensed that the market is weakening. Still it is a red month for the portfolio. Still there are lots of failed break outs in this weak market. However, the system will continue to systematically and patiently test the market and when the opportune time comes, deploy the large pile of cash to ride the market reversal.
Total return since inception fell to +30.26% still ahead of benchmark STI ETF ($STI ETF(ES3.SI) ).
May return: -4.18% (vs ES3: -7.09%)
YTD return: -5.21% (vs ES3: +3.59%)
Total return since inception (since June 2016): +30.26% (vs ES3: +22.96%)
What's going to happen in June?
As mentioned in last month's report, the system MATA module saw the risk of market weakening as we move into May despite the big rally of STI. True enough the market reversed and it happened pretty quick. Moving into June, the overall market is still weak as the percentage of uptrending stocks continues to drop. However, the system has not deemed the market to have entered bearish mode yet unless it weakens further in June. In addition, we are also entering an oversold region so a rebound could be imminent.
Actual SG portfolio performance post at
How was May like for US stock market?
As mentioned in the last monthly report, the system MATA module has reported that the overall market has plateaued and there could be reversal coming in May. True enough, the stock market has been tumbling for the whole of May as trade talk between US and China come to a standstill and Trump imposes tariff on Mexico at the end of the month. For the month of May, Dow Jones tumbled 6.68%, S&P500 fell 6.58% and NASDAQ fell 7.93%. "Sell in May and go away" indeed!
How did the US portfolio perform in May?
Thanks to MATA analysis that anticipated the market reversal in the beginning of May, the system has off loaded most of its holding going into May and was sheltered from the blood bath that ensued. Currently the portfolio is already 90% in cash. By the end of May, the system US portfolio only made a slight loss of 2.25% in May as compared to 6.58% decline for S&P500. That is one of the characteristics of a trend following system - to exit when the market starts to reverse and protect profit. If market continues to decline, losses will be kept at minimum and once the market reverses uptrend again, the huge pile of cash will be ready to be deployed. This is also one of the reason why the system beta is only half that of SPY (meaning only half as volatile as SPY!). Check out the system alpha and beta in our backtesting post.
Total return since inception is now +64.40%.
Portfolio May return: -2.25% (vs SPY -6.34%)
Portfolio YTD return: -3.13% (vs SPY +10.67%)
Total return since inception (since June 2016): +64.40% (vs SPY +39.15%)
What is going to happen in June?
Based on the system's MATA analysis, overall market is still weak. The G20 meeting between Trump and Xi could provide some hope for a market rally if things work out. As mentioned earlier, system is currently hoarding lots of cash (90% of portfolio is cash) so if the market continues to tumble, impact to the portfolio is minimised while waiting patiently for the next big uptrend wave to ride.
Actual US portfolio performance post at
May 2019 Singapore Portfolio Performance Report. Overall = +30.26%, YTD -5.21%
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