The MarketVector™-GammaRoad U.S. Equity Strategy Index (MVGMMA) employs a rules-based, adaptive process to allocate between U.S. equity exposure and Treasury Bills exposure based upon its fundamental, behavioral, and trend-based measures for U.S. equity market risk.
The equity market’s relentless march higher since its April low has given way to an increasing chorus of investors asking “Is this a bubble?” Indeed the market delivered another strong month to fuel this developing narrative, as the S&P 500 Total Return Index returned +2.34% for October and brought its year-to-date return to +17.52%. The MarketVector™-GammaRoad U.S. Equity Strategy Index (Bloomberg: MVGMMA Index) maintained its conservative positioning through the month and returned +1.04%, which raised its year-to-date return to +8.80%.
We would humbly suggest that the “bubble question”, while entertaining to discuss, is not the most helpful question to be asking now. At any point in any market cycle, we believe the only relevant question for an investor is “What is my plan, regardless of what the market might do from here?”
The current market environment and this growing “potential bubble” narrative more than ever exemplify the value of preparation by adhering to a rules-based process. The seemingly widespread fascination with constantly attempting to figure out the market’s next move is born from the natural human proclivity for storytelling, yet it provides no substitute for having a plan already in place before portfolio risk can be compounded by emotional interference.
Given this context, we review the path of our strategy’s three key measures of market risk this year, and what they are saying as of early November in our latest monthly strategy update here.
About the Author:
Jordan is the architect of the MarketVector™-GammaRoad U.S. Equity Strategy Index and co-founder of GammaRoad Capital Partners, LLC. Prior to launching GammaRoad, Jordan was the Chief Investment Officer for Legacy Heritage Partners LLC, where he managed the institutional private foundation and family office portfolios. Before joining Legacy Heritage Partners LLC, Jordan was the Senior Investment Strategist for IBM Retirement Funds, where he was responsible for asset allocation and investment risk management for the U.S. pension fund. While working at IBM, Jordan was featured in CIO Magazine’s 2015 Global 40 Under 40 issue. Prior to joining IBM, Jordan was a Principal in Mercer Investments’ New York office with a focus on asset allocation, strategy implementation, and manager selection for endowments and foundations, corporate pension funds, defined contribution plans, and insurance captives. Jordan is a CFA Charterholder and holds a Bachelor of Arts in Economics from Emory University.
For informational and advertising purposes only. The views and opinions expressed are those of the authors but not necessarily those of MarketVector Indexes GmbH. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts, and other forward-looking statements that do not reflect actual results. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. MarketVector Indexes GmbH does not sponsor, endorse, sell, promote, or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. The inclusion of a security within an index is not a recommendation by MarketVector Indexes GmbH to buy, sell, or hold such security, nor is it considered to be investment advice.
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