Jump to content
dydo

Trading Strategy

Recommended Posts

On 6/7/2018 at 11:36 AM, explo said:

I will update more frequently now to keep track of whether TAN is clearly diverging from market.

I’m not comparing against TAN anymore. But the divergence trend keep forming. These trends take time to be well confirmed, but we are getting there.

https://yhoo.it/2x1we4A

Edited by explo

Share this post


Link to post
Share on other sites

I'm breaking out the inflation from the Risk-Free return source to get the full picture of the return breakdown. The risky return sources - Alpha and Beta - are always real. It's very clear then that we are in a risk-on period now with inflation being higher than the Risk-Free return causing the real Risk-Free return to be negative. Risky investments are required now to preserve (and hopefully grow) the purchase power of wealth.

return.thumb.png.f96d5846779407b000c44c0ceee17a6a.png

Note that I'm in Europe which is a bit behind and more extreme than US on its monetary policy. Although the (short-term) US Risk-Free rate of return (13 week treasury bills) has been rising quickly (flattening the yield curve) the inflation there is still outpacing it, so the profile of negative real Risk-Free return applies to a USD denominated portfolio too. Due to the rate differential together with the growth differential between the US and the rest of the world capital is flocking to the USD for the purpose of both risk-free and risky investment. Fortunately my portfolio is very positively exposed to that trend and has recently gained a lot on this current state of the world.

Edited by explo

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Donate

    Please donate to support this community. We appreciate all donations!

    Donate Sidebar by DevFuse
  • Upcoming Events

    No upcoming events found
  • Forum Statistics

    • Total Topics
      33
    • Total Posts
      90,608
  • Who's Online (See full list)



×