The Mosaic Global Fund’s estimated performance for the month of October is 0.54%, which brings the estimated year to date return to -1.50%.
The focus of the month was again the problems arising from the US hitting their debt ceiling and speculation on how this could affect markets. During the month, President Obama managed to solve the problem with an extension until February. As everyone knows, this is hardly a solution to the problem but rather another “quick fix” that pushes the issue into the future.
In the beginning of the month the stock markets sold off. But with a temporary solution to the debt problem on the table, stock markets quickly recovered, particularly the US, bringing markets to new all-time highs again. The US bond markets acted surprisingly unconcerned with the fact that due to a threatened shut down, the risk could be that some bond holders would not get paid.
In general, the European stock markets have shown comparative strength against the US markets, with investors looking more positively on the continent. Markets are also substantially cheaper in Europe than in the US. Emerging markets have started to show some signs of wanting to recover from a sustained period of weakness. Looking at some other asset classes, we can see that Gold and commodities overall are still showing weakness together with long bonds and inflation linked investments.
We also like to share an interesting anecdotal example that could perhaps be of interest. You might be aware of the well-known magazine Barron’s. Barron’s tends to turn very bullish at tops and bearish at bottoms. Bearing in mind that the US stock market (S&P 500) is up approximately 165% since its bottom in 2009, last week’s front cover ran the headline “Return of the Bulls”. At the same time the average interviewed US Money Manager expected the stock market to be up 7% by mid-next year. This anecdote is obviously not an indicator we use when we invest but we can’t avoid the signs.
The Mosaic Global Fund has reduced its stock market exposure during the month. Our trend following holdings had a very strong month. In addition, our hedge fund and stock market holdings delivered positive returns.
Have you had a chance to speak with us about our newly implemented Trend and Momentum Filters yet? If not, please drop us an email on, email@example.com, or give us a call on, +352 202 033 27, to find out more.
We look forward to speaking with you shortly.
To Your Investment Success!
Per-Olov Jansson & the Cardea Investment Team