The last 31 weeks in the US financial markets. Buy & Hold vs Kb Meter
31 weeks, the period from September last year to the present. A period in which a little bit of everything has happened in the financial markets. From the FED’s interest rate announcements to the election of Donald Trump, from the BoJ’s shock to the tariff war.
So we tried to simulate the performance of a portfolio consisting of US equities, short-/medium-term US government bonds and gold. We did this using our forecasting algorithm and a simple buy-and-hold strategy. A way of confirming the complexity of these weeks and the resilience of a well-diversified strategy.
The most “popular” asset was gold, followed by US equities and short-term Treasuries. Of the 31 weeks simulated, 13 showed no signs of change. Despite this, the volatility was slightly lower than the Buy & Hold strategy (5.8% for KB versus 7% for B&H), while the difference between the forward-looking analysis and B&H is significant in terms of returns.
The last “call” on equities by our algorithm was 19 weeks ago, at the end of November 2024. Since then, gold has been the star performer with 6 appearances compared to 4 for short-term government bonds.
Beyond the numbers, the simulation shows us how the long march towards risk-off started at the end of 2024 and then exploded in the chaos following Trump’s announcement of reciprocal tariffs.
Disclaimer
The performance of the strategies illustrated on this site are derived from historical data tested retrospectively and do not represent actual investments or their results. Back-testing and historical performance do not indicate or guarantee future results. Therefore, it should not be assumed that the future performance of any strategy will be profitable or similar to corresponding levels of past performance, and it should be taken into account that any investment, including those made on the basis of any strategy, has the potential for loss. Retrospective results are based on certain assumptions regarding the market and our analysis of past performance, including, but not limited to, the assumption that an investor would be able to purchase the securities selected by the model and that market liquidity is constant. Deviations from these assumptions may materially affect retrospective returns. We make no warranty as to the assumptions made in the model, including, without limitation, that such assumptions are reasonable, sufficient or correct. Our back-testing models are based on data from third-party data providers and we do not warrant that such information is accurate or complete. Furthermore, these data, formed retrospectively, do not take into account actual trading influences or unforeseen economic and market events. Furthermore, as these are not actual transactions, the results may not take into account certain market factors and may not reflect the potential impact of various economic conditions.
