LIVE TRACK RECORD Page Summary: Maximising reward while minimising risk |
Discussion and Evidence
| Sceptic: | Back-testing has a horrible tendency to back-fire when faced with reality, because investors eventually learn from the past |
| Response: | The live record of recommendations by our Shares RouteMap suggests that there are structural inefficiencies for stock market investors to exploit |
| Key Facts: | Our Recommended List both reduced risk during the bear market and maximised gains during the bull market |
| Statistics: | In the first seven years of live operation total returns were +175% versus only +32% for the FTSE Global Index |
Explanation Figures are shown in US$ for convenience. Owing to exchange rate fluctuations, past performance differ if measured in any other currency. Performance is shown gross. Net results will depend on the level of commissions and dealing spread for the chosen investment vehicles, as well as any transaction taxes in the country where dealings take place. |
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| Sceptic: | Superior performance often disappears when adjusted for risk. |
| Response: | Yes, but not in this case because the Recommended List is designed to include include cash balances, where markets are unattractive |
| Key Facts: | Up to half was held in cash during the bear market. That reduced volatility, when compared to our benchmark. |
| Statistics: | The standard deviation of monthly returns is 3.5% for the Recommended List versus 3.9% for the benchmark.index |
| Explanation The Shares RouteMap provides recommendations on 50 countries and regional mandates. This chart shows the proportion of them that are in the Recommended List. Markets are added when the rating rises to add or Buy and deleted when the rating declines to Reduce or Sell. |
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| Sceptic: | So, your system probably made some big bets and you simply got lucky |
| Response: | That is unlikely because the relative performance charts show remarkable consistency through very varied market conditions |
| Key Facts: | Recommendations have also outperformed in both bull and bear markets compared to the total return for the FTSE World Index |
| Statistics: | Over the first sevenyears of live operation our Out-Perform Recommendations have beaten their global benchmark by +73% |
| Explanation This chart shows the performance of our Out-Perform Recommendations compared to a capitalisation weighted index of global markets produced by FTSE. These results assume funds are divided equally between all the positive recommendations. |
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For further information on other RouteMaps, please see Report and Analysis