Commentary & Market Analysis is now posted on the Stadion Blog, Going the Distance.
September 17, 2012
Unlike the regularity of season changes, the fickle financial markets have but one constant: price. This is the constant on which Stadion's tactical models have been designed to read and react. Ignoring what is driving market action, price is the ultimate reflection of how the market has absorbed the forces that affect it. How critical is the markets' factoring of forces? Market movement (versus asset allocation or security selection/timing) is responsible for 70% of investor returns. This explains Stadion's use of indicators to track market internals and sector movement.
April 23, 2012
Will McGough, CFA, a Vice President on our Portfolio Management team, recently reviewed the first quarter of 2012 in our quarterly investor newsletter Vantage Point. In the article, Will discusses the relationship between sovereign debt and market volatility. And, more importantly, the long-term impact of government liquidity actions on inflation and currency depreciation.
March 8, 2012
Over the last couple of months we have seen a welcome change in the market's behavior. For a trend-following strategist like Stadion, 2011 was a brutal year - with wild sideways trading ranges that resulted in numerous 'whipsaw' trades as Stadion's model reacted to several periods of intense price swings. But so far in 2012 - as if a switch has been flipped - the perilous trading range has given way to a fairly steady uptrend for the first time in almost a year.
February 17, 2012
Stadion's investment strategy is built on a foundation of trend following and technical analysis. While we do not use chart analysis in our decisions to be invested or not, it is a useful tool we employ in our portfolio management process. The chart below shows the S&P 500 from 12/31/2010 through 2/16/2012. The red box outlines an area of resistance established early in 2011 and retested several times throughout the first half of the year. As you can see, we are once again within this resistance band. Typically at these areas, prices may have a difficult time "breaking through" this band to the upside. It is normal to see increased volatility or even a decline in prices as the market tests this level of resistance.
December 5, 2011
Just like football, results are sometimes affected by conditions that can't be controlled. In our business, investors can be quick to become concerned during periods of underperformance. However, this discounts two critical realities: the most important one is that Stadion has been utilizing the same trend following model for more than 15 years, through many different types of markets including sideways markets just like this one. Even though the genesis of sideways markets may vary, in the past 15+ years we have seen no less than 10 similar range-bound environments.
Past performance is no guarantee of future results. Investments are subject to risk, and any of Stadion's investment strategies may lose money. Investment return and principal value of an investment will fluctuate so that an investor's portfolio may be worth more or less than their original investment. The investment strategy presented is not appropriate for every investor and individual clients should review with their financial advisors the terms and conditions and risk involved with specific products or services. Stadion's actively managed portfolios may underperform during bull markets.