On Our Way To A Banner Year

Let's face it, sometimes making money in the markets is tough, even for professionals. Some of the big names in the hedge fund industry have under-performed the market and even lost money over the last several years.

Every year, hundreds of hedge funds go out of business due to investors becoming disenchanted with mediocre to poor returns (remember, with hedge funds there is a management fee of usually 2% on invested capital and 20% of any profits).

Every investors’ dream is to find a way to consistently make money in the market with the least amount of risk. The question is, does something like that even exist? Continue reading "On Our Way To A Banner Year"

Here's How The World Cup Portfolio Performed In 2015

There is no doubt about it 2015 will be viewed as a very tough year for most investors. Most of the large hedge funds were not immune to losing money with many of them going out of business. This is in sharp contrast to the easy money years of 2009 through 2014 when the Fed was dropping rates and printing money like it was going out of style.

Today I'm going to be looking at the World Cup Portfolio and see how it performed quarter by quarter market by market. The World Cup Portfolio was not immune to the challenges of 2015, but it did finish the year in the black.

While the World Cup Portfolio showed a positive return at the end of 2015, it was the lowest return that the portfolio has had since its inception. The 19.4% return for the year while positive and still very respectable by most measurements was somewhat disappointing by our standards.

So let's go through the markets quarter by quarter and see how the WCP was able to show a positive return when many others didn't. Continue reading "Here's How The World Cup Portfolio Performed In 2015"

Make No Mistake About It, Q2 Was A Tough Quarter!

Hello World Cup Portfolio fans, here's how things turned out in what was a very difficult trading environment in Q2.

But first, let's start off with some positive news. As you may know, we trade six different markets and out of those six markets we made profits in three of those six. The profits in corn, wheat and soybeans, while very good, were not enough to make up for the losses in the other three markets. The other three markets were, for the most part, in trading ranges and very choppy and difficult to trade for the entire quarter. The markets in question are crude oil, gold and to a lesser extent, the Dollar Index.

2008 2009 2010 2011 2012 2013 2014
+501.6% +48.5% +35.3% +186.7% +57.6% +77.1% +135.8%

Past performance in no guarantee of future performance. Losses can and do occur.

We have never had a losing year in the World Cup Portfolio. In Q1 of this year, we had a really good quarter with a gain of around 23%. In Q2 we gave it all back in extremely difficult and choppy trading conditions, which puts us flat on the year.

Let's take a look at which markets we made money in and which markets we lost money in, along with the reasons why. Continue reading "Make No Mistake About It, Q2 Was A Tough Quarter!"

Triple Digit Returns In 2014 For The World Cup Portfolio

MarketClub's model portfolio section showcases three portfolios using MarketClub's strategies that you can follow and see how well they are doing. We provide you with all the entry and exit points for each market in each portfolio so there is nothing to second guess.

World Cup Portfolio

The final results are in and once again the World Cup portfolio (WCP) knocked it out of the park with triple digit returns. This is the third time in 7 years that this portfolio has chalked up some of the best returns in the investment world. We have continually published the daily signals and the results for this portfolio since 2007, so this year's results are no fluke.

The big winner in 2014 was, of course, being short crude oil. This strategy produced spectacular results and was responsible for almost half of our profits for the entire portfolio. With gains of $38,130, representing a 76% return on total invested capital, this commodity was a standout, just trading one contract of crude oil. Next up was gold, which was responsible for producing a return of $7,793, equaling a 15.5% return on invested capital.

WCP Cumulative 2007 thru 2014

Total capital needed to trade the World Cup portfolio is $50,000. (Remember, we are not brokers nor do we manage money.)

Every single market showed a profit in 2014, however, not every single market showed a profit in every quarter. This is why it is so important to be diversified as it lowers your risk profile while raising you profit profile.

Here is the quarterly market breakdown per share: Continue reading "Triple Digit Returns In 2014 For The World Cup Portfolio"

What's More Volatile, Stocks Or Commodities?

If you said stocks, you'd be right. There's a big misconception that commodities or futures are more volatile and risky than stocks. The truth is, what makes commodities or futures appear risky is the leverage factor. You only have to margin up a small amount of capital, usually less than 5%, to control a large amount of capital. What that means is when the market moves even a small amount, you get a bigger return, or in some cases a bigger loss, on your money because of leverage. If you put up the whole value of a commodities or futures contract, you effectively de-leverage your investment and at the same time lower your risk and return.

For example, say you want to buy 100 ounces of gold. At the current price, you would have to pay $123,500 and you would own the gold. Instead, you could buy 1 futures contract of gold worth $123,500 and only margin up $4,400. Now let's say we have a $10 move in gold. On 100 ounces that would be worth $1000. As you can quickly see, the return on $4,400 is a heck of a lot higher than the return on $123,500 if you owned the gold outright. Which would you rather have, close to a 25% return on your margin on 1 futures contract, or have a $123,500 tied up in physical gold and see a return of less than 1%?

That, my friends, is why commodities or futures are interesting and can be very profitable when you approach the market with discipline. Naturally, leverage slices both ways and you could lose just as fast as you make money. The key here is to be diversified like our World Cup Portfolio.

Here's the 6 individual markets of the World Cup Portfolio shown quarter by quarter. As you can see, not every market made money every quarter, but combined every quarter was profitable. This underscores the power of diversification and disciplined trading. Continue reading "What's More Volatile, Stocks Or Commodities?"