Friday, September 7, 2012

August 2012 Returns

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Seasonality at this time of year still favours Energy, Gold, Agriculture and Natural Gas. Natural Gas is the only sector not participating, possibly due to the run up in June and July. North American equity markets continue to trend higher.  My time horizon remains short as we enter into the worst seasonal period of the year based on historical trends.

I had made a choice not to play gold, even though seasonality favours it at this time of year.  First, I would rather invest in gold companies rather than bullion, and a big enough decline in the market causes everything to drop at the same time.  At such times, even gold offers little protection.  Second, I wasn't crazy about the idea of holding a more highly volatile ETF given the high market volatility.  I am now thinking that was the wrong decision, but take comfort in not, potentially, putting funds at risk.  I am all about risk vs. reward, although in this case I underestimated the reward potential  Still, a dollar saved is a dollar I can use later.
20 month return for TSX @ August 31, 2012 = -10.94 percent
Return for Basic Timing Model Using XIU =        9.59 percent
Return for Advanced Timing Model =                -4.36 percent
Money for charity =                                        $0.00

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