Current view
VEVE has been setting new all-time highs of late. Clearly the current political situation – wars and elections – does not appear to be dampening investors’ spirits to be owners of the biggest and best companies around the world.
Economic news (or lack of bad economic news) would appear to be trumping the political scene, especially the apparent taming of inflation and interest rate cuts that are expected off the back of that.
As VEVE climbs higher the odds of a downturn that we can take advantage of increases. It will take only a minor change in sentiment for that to happen.
Reflections on PIP-VEVE to date
Several of you have asked if, one year or so into PIP-VEVE, if it has gone as I expected and if I am happy with the results.
Broadly speaking we have captured 60-70% of the total VEVE return, but only been invested 20% of the time.
To get a good chunk of the return for a much-reduced exposure to stock market volatility is a good thing. The risk/return profile looks nice.
It looks even nicer when we consider that your PIP-VEVE money would otherwise have been in bonds. Over the same period bonds have lost 0.15% overall.
So, yes, I am pleased with the results so far.
Has it gone as I expected? That is too difficult to answer, so I will not, other than to say……
The one thing that has not happened that I did expect to happen, was for us to get stuck with VEVE for an extended period.
By that I mean we bought VEVE, but the price recovery took much longer than we have experienced.
For reference, our shortest holding period to date has been10 days and the longest 26. The average is 17 (2.5 weeks).
I suspect if we found ourselves holding for 5 weeks (twice the average) that might start to test our patience. At that point might we want to take a 2.5% profit to “get out and reset”?
I do not know the answer, but I do expect our patience to be tested sooner rather than later.
The NASDAQ100 Experiment
As per the reference in the note of 9/10/24, I am no further forward with my thinking on this.