Currently, we are fully invested and long US equities. The is the most bullish position we have had since inception. We got in this position following our methodology. We entered the month hedged in a synthetic option in both the DJI and S&P. After weak retail sales and going into the G20 meeting, we went long new positions in the both the DJI and S&P because we expected central banks to unify behind easy money. After the release of the Fed minutes, we executed our synthetic options leaving us doubly long the DJI and S&P because the minutes confirmed the Fed would not tighten in December. The rest of the month has been spent in a tight range as the markets continue to believe the Fed will tighten.

We continue to believe what we wrote in our last email,

“We have always felt, the Fed would not tighten in 2015 and are now comfortable saying they will not tighten in 2016 unless the US economy becomes overheated. If we listen carefully to the Fed, their expectation of inflation reaching their longer-term objective of 2%, is not until 2018! If they are right, the Fed will be tasked in keeping interest rates low until the US and Global economy can re-inflate....Therefore, moving towards the end of the year, we expect both global bond and equity markets to rally as the European Central Bank eases further in early December and as expectations of Fed tightening decreases.”

Modeled performance since inception, May 2012, net of all fees is +255.32%
In 2012 modeled performance (7 ˝ mo.) net of all fees was +12.46% with a 10% Hurdle rate
In 2013, modeled performance net of all fees was +19.73% with a 10% Hurdle rate
In 2014, modeled performance net of all fees was +56.42% with a 10% Hurdle rate
In 2015, modeled performance net of all fees is 72.18% with an 8% Hurdle rate