Commentary

  • Driving Whilst Looking Backwards

    In Market Analysis on

    Want to grasp the counter-intuitive nature of investing? Try driving whilst looking to the rear (see lengthy liability disclosure below). Or, if that seems like a bad idea, carefully consider these probable outcomes: The counter-intuitive nature of investing is both perilous and unrelenting. After markets rise, we “feel” like there are more gains ahead. If gains continue, optimism increases. If

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  • Stock Complacency Arises as Market Risks Intensify

    In Market Analysis on

    Stocks and bonds were a mixed bag in the third quarter. The S&P 500 increased 1.1%(i) for the quarter while other asset classes fared poorer. The MSCI EAFE (International) Stock index lost 6.4%, the Russell 2000 was down a painful 7.36%, and the Merrill Lynch High Yield Bond index declined 1.9%. Inflation protected bonds were also down. Toews began the

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  • Stocks Continue Rise in the Second Quarter

    In Market Analysis on

    Toews began the quarter with a partial (1/3) allocation to US Stocks, with all other asset classes fully invested. We completed our exit out of US stocks in Mid-April. During the quarter, small cap stocks initially suffered losses while the S&P remained relatively steady. Stocks began to rebound and our system re-entered in late May. We finished the quarter fully

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  • Stocks Hold Significant Risks even at Fair Value

    In Market Analysis on

    Investing platitudes (allocate, rebalance, repeat) about stocks betray the high risks and limited time horizons for the bulk of investors. The reason has everything to do with the way we price stocks. Small businesses, not listed on exchanges, sell for low multiples (example: 4 times earnings). But when companies grow and eventually go public, valuations average 15 times earnings. Instead

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  • Toews Delivers Up Capture as Tactical Suffers

    In Market Analysis on

    Investors remained anxious entering 2013, and there was no shortage of stress-evoking events. Despite that, the S&P 500 realized the best gain since 1997, rising 32.4%. Toews investors spent the majority of the year fully invested in stocks across their allocations. In fact, with the exception of 6 market days when we were 2/3 invested, our US stock algorithm remained

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