Below you will find the Columbus strategy highlights for this month.  For more insights and a detailed discussion, including to get the monthly portfolio allocations, please download the report.

Global Worries…

  • The Federal Reserve stayed put and decided not to raise interest rates today, while giving dovish forward guidance “in light of global economic and financial developments and muted inflation pressures.”  One way to interpret this is the Fed is getting worried about the global slowdown in Europe and China.
  • Stocks have recovered nicely in the past weeks, but this doesn’t mean the equity bull market is back.
  • While Columbus got out of stocks and shifted to a prudent allocation in October, the equity rally is not convincing enough for Columbus to change its general stance towards equities.  Other asset classes are preferred for their lower volatility and positive upside, namely treasuries, gold, the US dollar and real estate.
  • For more insights on the behavior of market tops and how to proactively manage risks, please read our special report published on October 14, “Keep Calm and Follow the Data“.  If you don’t have it, please reply to this

To learn more about how Columbus navigates this market, please download the report and read the discussion in section 6.

Please don’t hesitate to contact me should you have any questions.

Best regards,

Jean-Marc and the Laplace Insights team

Backtesting Strategies & Overfitting

Strategy backtesting is often used to test an investment strategy from historical stock or ETF information (usually price).  The belief is that if a strategy performed well in the past, then it should continue to perform well in the future.

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