15 December 2016: Volatile volatility

volatile-volatilityYesterday, volatility showed a lot of… uhm… volatility. Investors were unsure what to make of the circumstances, before and after the outcome of the Fed meeting became clear. Probably we are now arriving where we should have been just after the US Presidential elections: in a state in which we are unsure whether we should be sure or unsure. The patterns we saw yesterday will probably be characteristic of what 2017 will look like. Many days, investors will struggle between hope and despair. Periods of changes in volatility will be much shorter than what we are used to. These Dutch Guys are curious to know how their model will behave under this kind of circumstances. Part 1 has whetted its appetite for more…

white-chapel-logo-small

Exactly what was expected happened: Janet Yellen, chairman of the Fed, announced a rate hike yesterday. Yet, stock prices slid after the announcement. The outlook for more rate hikes in 2017 made investors cautious. All major US indices recorded losses between 0.5% and 0.8%. Volatility had a very bumpy ride, but the VIX ended the day up almost 4%. Our UVXY ETFs were deeply in the red for most of the day, but ended it with a small loss: -0.6%. Return for the year for our model stands at 332%.
White Chapel is a little bit less optimistic about upcoming volatility, but is still advising us to keep our UXVY ETFs.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$43,168

+331.68%

+331.68%

+40.9%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 370%.

RS_v05-smallWhile taking a walk through the city center of his hometown, René took notice of the big trees that adorn the town’s central square. It’s not that he walked there for the first time, but it just so happens that you see things in a different light every now and then. This time, this was literally so. The bright backlighting turned the square into a high contrast scene where the trees stood out as if sketched in with India ink. Impossible (for René) not to pause for a photo opportunity. Imagine what this scene would look like, without the trees. Just bricks. Nice bricks forming nice buildings, but bricks nonetheless. Here’s the exception to the rule that “less is more”: trees in cities.
breda_city