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Henry Ma, CFA
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Dr. Henry Ma, CFA, is the President and Chief Investment Officer of Julex Capital Management, a quantitative investment firm specializing tactical asset allocation strategies using a unique adaptive investment approach. The firm offers a variety of tactical/unconstrained strategies aiming to... More
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Julex capital management, llc
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All Season Investing
  • Stocks Had The First Decline In Six Weeks | Multi Asset Investments 8-26-2012 0 comments
    Aug 27, 2012 2:24 PM

    Top Stories Last Week

    • Stocks Had the First Decline in Six Weeks

    U.S. stocks ended the week lower, the first weekly decline in six weeks. Trading volume was light and no significant economic news was released. The Dow Jones Industrial Average was down 0.7% and Standard & Poor's 500 Index (SPX) was off 0.5% from a week ago. MSCI EAFE index declined by 0.4% and MSCI Emerging Market index lost 1.0%.

    • Apple Became the Most Valuable Company in History

    Apple set record for world's most valuable company at $621 billion in history on Monday in terms of market capitalization. The reason for the rise on Monday in the stock appeared to be rumors surrounding the release of iPhone 5. The previous record-holder was Microsoft which hit its all-time high on December 30, 1999 at the height of the internet bubble.

    • China's Manufacturing Sector Continued to Contract

    HSBC's initial purchasing manager's Index for Chinese manufacturing fell to 47.8 from 49.3 in July. China has been hit particularly hard by the recession in Europe. The European sovereign debt crisis has also prompted severe austerity measures, which weakened demand in the euro zone, the largest market for Chinese exports. In addition, slow recovery in the US cut demand for Chinese exports.

    • UK's Double Dip Recession Continued

    Britain's economy shrank less than first feared in the second quarter. GDP fell by 0.5%, which was in line with economists' expectations. However, the gross domestic product has been declining for three consecutive quarters in the country's second recession in four years.

    • US Housing Market Recovery Was Taking Hold

    Sales of new homes in the US rose 3.6% in July to match a two-year high. Existing-home sales increased 2.3% in July from a month earlier to a seasonally adjusted annual rate of 4.47 million, the National Association of Realtors said Wednesday. The month's sales were 10.4% above the same month a year earlier. These are the latest signs of a steady recovery in the housing market.

    Top Stories to Watch This Week

    • Bernanke / Draghi Will Speak at Jackson Hole

    Fed Chairman Bernanke and ECB president Mario Draghi will speak at the central bank meeting held in Jackson Hole, Wyoming. Investors will try to get more hints on further quantitative easing.

    • US Consumer Confidence

    The US consumer confidence, a gauge on US consumptions, is expected to improve slightly.

    • Samaras-Hollande Meeting

    Greece Prime Minister, Samaras, will a meeting with French president, François Hollande, to discuss about the next Greece loan tranche of €31.5bn. Investors will watch carefully the progress of European crisis.

    Weekly Performance Summary

    The portfolios except the Concentrated Portfolio had positive performance last week as a result of the positive bond performance.

    Table 1: ETF Performance

    Asset Class Return     Last Week Return MTD Return YTD Return
      SPY US Large Cap -0.47% 2.76% 13.84%
      IWM US Small Cap -1.19% 3.05% 10.36%
      EFA Developed Market Equity -0.38% 4.20% 7.64%
      VWO Emerging Market Equity -0.97% 2.35% 7.17%
    Dividend Assets          
      IYR US REIT -0.05% -0.63% 16.46%
      AMJ US Energy Master Trust -2.57% -1.01% 2.92%
      GLD Gold 3.35% 3.50% 6.57%
      GSG Commodity -0.06% 5.77% 3.37%
      HYG US High Yield 0.67% 1.05% 7.30%
      AGG US Bond 0.53% -0.49% 2.99%
      TIP US Treasury Inflation Indexed Bond 1.29% -0.87% 4.81%
      IEF US Treasury Bond 1.05% -1.17% 3.30%
      TLT US Long Term Treasury Bond 2.64% -3.57% 4.59%
      SHY US Short Term Bond 0.07% -0.06% 0.18%

    Table 2: Portfolio Performance



    Portfolio Solutions Asset Allocation
    (%Risk Asset
    (1 day delay)
    (1 day delay)
    (as of 12/11)
    (as of 12/11)
    (as of 12/11)
    Aggressive 80/20 0.7% -0.3% 4.6% 12.4% 16.4% 16.1%
    Moderate 60/40 0.8% -0.4% 3.8% 12.4% 14.8% 14.4%
    Conservative 40/60 0.9% -0.5% 3.5% 12.5% 13.7% 12.8%
    Defensive 20/80 0.9% -0.6% 4.1% 13.2% 12.5% 11.1%
    Concentrated Portfolio Two ETFs -1.3% -0.8% 6.8% 12.1% 19.1% 19.3%
    S&P 500 Index   -0.5% 2.8% 13.8% 2.0% -0.3% 2.9%
    Barclays Bond Index   0.5% -0.5% 3.0% 10.3% 6.9% 5.8%
    CPI Inflation         3.2% 2.3% 2.5%

    For more information about the multi-asset investment strategies, please visit allseasoninvesting.com.

    About ALL SEASON INVESTING: All Season Investing is an investment blog, created in December 2011 to offer investors insights and researches on how to implement a dynamic multi asset allocation strategy with the low-cost index funds or ETFs to achieve consistent returns while limiting downside risks through all stages of a market cycle.

    Disclosure: I am long SPY, IWM, EFA, VWO, IYR, AMJ, GLD, GSG, HYG, JNK, AGG, TIP, IEF, TLT, VNQ.

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