We’re not afraid to admit that one of our biggest traditions in the office had something to do with Wilson Phillips. Whenever Managed Futures was in a drawdown, we used to pull out our CD player (yes, we had a CD player… this was before the iPhone or Spotify people) and blast their hit “Hold On” that debuted in 1990 (which we just learned, is the year some people in the office were born). It’s not just the harmonized vocals that provide us comfort, but the lyrics, which we think was secretly written for an investor in a drawdown.
“I know that there is pain
But you hold on for one more day and
Break free, break from the chains
Don’t you know things can change
Things’ll go your way
If you hold on for one more day yeah
If you hold on..”
We won’t say we’re trend setters, but the song did make a major comeback in 2011, when they performed “Hold On” at the end of the comedy classic “Bridesmaids.” (see the video here)
With the SG CTA Index currently down -5.15% since its highs in February, and several high profile managed futures mutual funds down double digits from their highs, we wanted to send out this cult classic to all those invested in managed futures who right now just need to hold on… and have “things go your way.”
The instructions are simple, listen to the song, or watch the end of Bridesmaids until you feel better, while markets (typically) complete their trend reversals, volatility consolidations, and generally set themselves up for the next round of directional volatility.
Here are some stats from one of our favorite managers in the mutual fund space, Auctos Capital Management ($ACXIX), who just happens to know a thing or two about controlling the downside after seeing these charts:
Performance as of 4/21/16
While we know it won’t work given investors’ penchant for chasing returns – we’ll say it anyway: this can be a great time to get in! Not only are managed futures due for a bounce after this down streak, stocks and bonds are looking iffy (billionaire Druckenmiller basically told investors to run recently). So, in the words of Wilson Phillips, “go ahead and break free, break from the chains” of performance chasing and sell some of the over performer (stocks) to put into the current underperformer (managed futures).