Euphoria

While the rest of the world is consumed by what’s happening in Washington, Wall Street (and the equivalent Avenues, Boulevards, and so forth across the world) seem they couldn’t care less about the drama as they keep putting in new all-time highs. These days, with friends and family asking about shorting volatility, it doesn’t seem like an investor can make a wrong decision about broad based stock indices, with World Stocks up near 20% YTD, U.S. Stocks at +12% YTD, and nearly every other asset class making gains in July. Even the dismal long-only commodity sector made gains to break a string of six straight months of losses.

The question on the Contrarian’s mind is when will the damn break? Or maybe we should be asking will the damn break? Our favorite (required) mantra is past performance is not necessarily indicative of future results – and while that is usually used to caution investors from putting too much reliance on a new hedge fund or the like – the words seem most apropos to the stock market at these levels.  These dizzying returns will stop at some point… but when that is — is the million dollar question. Which camp are you in? Is there a black swan on the horizon that’s staring at us in the face without the ability to decipher it? Or are have we solved all of the problems which led to two crashes in an eight-year span?

Whichever it is, here’s the euphoric market – by the numbers:

Asset Class Scoreboard August 2017


Source: All ETF performance data from Morningstar.com
Sources: Managed Futures = SocGen CTA Index, Cash = 13 week T-Bill rate,
Bonds = Vanguard Total Bond Market ETF (BND),
Hedge Funds= IQ Hedge Multi-Strategy (QAI)
Commodities = iShares GSCI ETF (GSG);
Real Estate = iShares DJ Real Estate ETF (IYR);
World Stocks = iShares MSCI ACWI ex US Index Fund ETF (ACWX);
US Stocks = SPDR S&P 500 ETF (SPY)

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

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