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S&P: Has optimism gone wild? |
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by: Bill Reavis
February 1st, 2012
This year kicked off with some improving economic data on jobs and retail spending and even a rally in the stock market. So does the good news suggest the economic recovery is finally taking hold in 2012? Jamie Dimon, the CEO of JPMorgan Chase, was optimistic and said the troubled housing market has bottomed. He added, “Barring a disaster out of Europe, I do see a fairly broad, growing economy. The economy is in a mild recovery, which is strengthening. Corporations are in outstanding financial shape.” These are big words from someone who some say is the smartest man in finance and CEO of one of the largest lenders in the world. (USAToday 1/31/12)
Since 1950, stocks have finished lower for the year only three times after posting gains in January, says the Stock Trader's Almanac, which created the closely followed "January Barometer" in 1972. This barometer states that, "As the S&P 500 goes in January, so goes the year." This market prediction tool has been correct 89% of the time since 1950, suffering only seven major setbacks. According to the CME data feed, the S&P index rose 4.45% in January. This has raised Wall Street's expectations, hoping that good times will continue, and stocks will finish the year with gains despite headwinds from Europe's debt crisis and a still-sluggish U.S. economy.
WWFS hopes that these optimistic views of the economy are right because while it seems like many of the opinions from WWFS shed negative light on market events, we feel the reality is that the average investor should be educated and informed of, not only ways to make money in good markets but, ways to protect ones portfolio during times of economic stress. The market environment in the US appears to be getting rosier for the moment...but we have all seen the market turn on a dime.
What does this mean for Worldwide Futures Systems and the effectiveness of the systems on a portfolio? The Survival Plan is an excellent stand alone investment but it was designed to help protect a standard stock and bond portfolio during times of economic stress, hence the name. One of more telling indications on our reports for indentifying performance in months that are identified as outliers is the Up Capture VS S&P and the Down Capture VS S&P. The following graphs illustrate the performance in the portfolio during the biggest up months in the market and the biggest down months in the market. (Graphs taken from Survival Plan- please see disclaimer)
Up/ Down Capture Graphs
 
S&P 500
If our readers have any questions/ comments over content written or reporting statistics please feel free to contact our offices.
Regards,
Bill Reavis
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239-221-8873
An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources, and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
This is provided for informational purposes only. No statement in this blog should be construed as a recommendation to buy or sell a futures/options contract or to provide investment advice. The content provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy and completeness.
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