Extracting positive returns during a GLOBAL meltdown

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As we come to the end of what many consider to be a global market correction month, we are pleased to mention that the month of October will now be marked as the second-best month of performance for MS E Wealth in 2018.

With US Equity markets averaging a 10-13 % correction, and a rough estimate of 9 trillion dollars of capital value being wiped out the global markets, October will be seen as one of the toughest months of trading for 2018.

So how was MS E Wealth able to out-perform all market expectations? It is rather simple. We have spent months preparing for events such as this. As many finance professionals may know, the similarities of the market correction in February 2018 compared to October 2018 are uncanny.

Here are a few points to compare both market corrections of 2018.

  • Market high of 26,715 made on Dow Jones before first global market correction on 29 January 2018

  • Market high of 26,958 made on Dow Jones before second global market correction on 03 October 2018

    • Only a 243-point difference between both market high levels before both market corrections of 2018 occurring

  • February market correction of 13.45 % from highest point of 26,715 to lowest point of 23,122

  • October market correction of 10.49 % from highest point of 26,958 to lowest point of 24,128

So, back to the question of how MS E Wealth was able to out-perform all market expectations. For the results, our main trading portfolio, with exposure to indices, stocks, commodities and Forex, produced a monthly return of 2.69 % whilst maintaining a 97 %-win ratio across a total of 42 trades.

Before we provide insight into how these returns were produced, we must start by mentioning the fascinating correlations between the returns produced in October 2018 in comparison to February 2018.

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Here is a breakdown of the correlations identified;

  • High number of trades compared to monthly average of 29 trades.

  • High win ratio compared to the monthly average of 90.12 %

  • Low drawdown compared to the portfolios’ maximal drawdown of 0.48 %

  • High % gain compared to the monthly average of 1.58 %

These correlations have been able to prove how MS E Wealth has been able to produce returns that are uncorrelated to market performance. By implementing a specialised investment thesis that focuses on the manipulation of volatility, we have been able to maximise the success rate, and returns during periods of extreme financial market volatility.

This process is simple. By closely monitoring the CBOE Volatility Index, as well as monitoring the global indices markets, we have been able to identify when the dispersion of volatility enters its most extreme levels of overbought or oversold. In doing so, we were able to predict (with probability) when we expect the market to return back to the historic price dispersion average. We are able to identify the probable path of price movement, the momentum of price movement and the duration of such movement.

Although we cannot share the details of these prediction models, we can justify why this model operates at the highest level of efficiency during extremely volatile periods. Utilising a combination of quantitative processes, algorithmic systems and discretionary decision making has provided a stable infrastructure of proven methodologies, and justifiable metrics for explaining such events of exaggerated performance.

In closing to our commentary, we would like to re-iterate a vital aspect to this article. MS E Wealth is not interested in maximising returns or hitting the so-called “home run” every single month. We are interested in producing returns that are uncorrelated to market conditions and ensuring portfolio stability during volatile times in the financial markets.


 Please note: This article is only for the presentation of research and performance data produced by MS E Wealth. At no point should this information be considered solicited advice or marketing content for distribution of ANY financial services or products.