Weekly Commentary, 11/23/15 – 11/27/15
In a subdued holiday trading week, the markets were able to hold gains in spite of Turkey downing a Russian jet and a one day decline in the Shanghai index of over 5%. The S&P 500 Index closed the week virtually unchanged while the broader NASDAQ Composite and Russell 2000 indices climbed 0.4% and 2.40%, respectively.
It is encouraging to see the smaller cap Russell 2000 index outperform the broader market averages and take out the high of November 6. This is consistent with the shift in breadth that we’ve noticed over recent weeks. However, this barometer that measures the willingness of investors to assume more risk has yet to pierce its 200 day-moving average. Meanwhile the larger, more risk averse, averages are well above their respective 200 day-moving averages. Over the past week the Stadion Dynamic Trend Model, which measures various measures of price, breadth and relative strength over various time frames, continued to see improvement from previous weeks allowing us to add equity ETFs to our portfolios. As we move into what is historically a positive month for equities, we will continue to monitor the market for changes in the Stadion trend and Sharpe ratio models.
The Stadion Managed Account Risk objectives are managed using a “core/satellite” approach. The core positions will comprise 40-60% of the portfolio and are invested in equity, fixed income and money market instruments with the strategic allocation becoming more risk averse as the risk tolerance of each fund changes. In allocating the objective’s satellite assets the remaining 40-60% of each portfolio, Stadion uses a proprietary, rules based weight of the evidence model. Based on continued improvement in the weight of the evidence in the Stadion Dynamic Trend model the portfolios moved to a fully invested position per the risk objective.
Past performance is no guarantee of future results. Investments are subject to risk, and any of Stadion’s investment strategies may lose money. The investment strategies presented are not appropriate for every investor and financial advisors should review the terms and conditions and risks involved. Stadion’s actively managed portfolios may underperform during bull markets. Some information contained herein was prepared by or obtained from sources that Stadion believes to be reliable. There is no assurance that any of the target prices or other forward-looking statements mentioned will be attained. Any market prices are only indications of market values and are subject to change. The Shanghai Stock Exchange Composite (SHCOMP) Index is a capitalization-weighted index that tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange. The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock price. The NASDAQ Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market and it is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies. The Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index. It is the most widely quoted measure of the overall performance of the small-cap to mid-cap company shares. It is not possible to invest directly in indexes (like the S&P 500) which are unmanaged and do not incur fees and charges. The Sharpe ratio measures the excess return per unit of deviation, or risk. Any references to specific securities or market indexes are for informational purposes only. They are not intended as specific investment advice and should not be relied on for making investment decisions.
Past Performance is no guarantee of future results. Investments are subject to risk, and any of Stadion's investment strategies may lose money.