Benjamin Franklin and the S&P 500

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This post was originally published on Trademakers

The S&P 500 is at its highest level in history and according to the Warren Buffet Indicator, it’s as overvalued as it was just months before a bear market and -27% decline.

There are also signs around the globe that are warning the S&P 500 is vulnerable to the downside (need confirmation). 3D Capital exists to make the S&P 500 a better long-term investment. We only invest in the S&P 500 because the only way to solve the problem of S&P 500 declines and make the S&P 500 a better long-term investment is to actively manage stock market risk with the stock market itself.

 

While we are rooting for the S&P 500 to continue its historic surge, we know that volatility will return and so will stock market down days, months, quarters, and even years. 3D Capital can help you prepare. Preparation is the key to winning and Benjamin Franklin’s quote is a great reminder, “If you fail to plan, you plan to fail”.

 

3D Capital has redefined risk management and protection in the S&P 500. Since March 2023, the S&P 500 has seen a historic rally. Below provides insight into our volatility based defensive 3D Bull/Bear Program that only invests in the S&P 500 Index and seeks profits and protection in the S&P 500. Benchmarks and other sources of stock market defense and diversification are also included.

March 2023 – May 2024

Net ROR

Sharpe Ratio

Correlation to S&P 500

3D Bull/Bear 26.8% 1.44 0.07
BTOP 50 (CTA Index) 6.0% 0.60 -0.29
Gold 20.8% 1.53 0.15

Performance comparison during the 10 biggest down days in the S&P 500 TR Index since March 2023

S&P 500 TR Index 10 Worst Days

3D Bull/Bear

BTOP 50 (CTA Index)

Gold

3/9/2023

-1.83%

7.68%

-0.54%

0.88%
3/22/2023

-1.64%

-1.57%

0.11% 0.44%
9/21/2023

-1.64%

2.38% 0.54%

-1.41%

1/31/2024

-1.61%

-0.29%

-0.50%

0.83%
4/25/2023

-1.58%

2.89%

-0.59%

-0.01%

4/30/2024

-1.57%

5.06% 0.32%

-2.32%

3/7/2023

-1.53%

4.29% 0.04%

-1.87%

9/26/2023

-1.47%

1.12% 0.20%

-0.87%

12/20/2023

-1.46%

-0.16%

-0.26%

-0.19%

3/10/2023

-1.44%

-0.49%

-2.43%

1.78%

Cumulative Return

-15.77%

20.91%

-3.11%

-2.74%

The BTOP 50 Index seeks to replicate the overall composition of the managed futures industry with regard to trading style and overall market exposure.

The stock market is an important piece of a broadly diversified portfolio. 3D Bull/Bear helps address Sequencing Risk, which is the risk of negative market returns occurring late in your working years and/or early in retirement. 3D Capital’s S&P 500 Programs are designed to actively manage stock market risk and can help you beat the S&P 500 over the long term.

 

Don’t forget, Risk Happens Fast in the Stock Market.

 

Sincerely, Eric Dugan
Chief Investment Officer at 3D Capital Management

Risk Disclaimer

3D Bull/Bear returns are calculated based on an assumed funding level of 25% and 50% of Trading Level and are intended to show the impact that 75% and 50% notional funding respectively has on returns (when those returns are expressed as a percentage of account valuerather than Trading Level). The returns are net of the Advisor’s 1.25% management fee and 15% incentive fee. Fees are charged on the Trading Level of the account. Returns do not include interest income. 3D Capital Management is a unit-based CTA. Per NFA requirements, the addition method is used to calculate annual rates of return because the trading level of the accounts managed did not fluctuate with prior month’s profits or losses. The CFTC has not passed on the merits of participating in any of 3D’s programs nor on the adequacy or accuracy of the disclosure documents. Other disclosure statements are required to be provided to you before an account may be opened for you.

Hypothetical Performance Risk Disclosure: One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. The risk of trading commodity futures, options, and foreign exchange (“forex”) is substantial. The high degree of leverage associated with commodity futures, options, and forex can work against you as well as for you. The high degree of leverage can result in substantial losses as well as gains. You should carefully consider whether commodity futures, options, and forex are suitable for you in light of your financial condition. If you are unsure, you should seek professional advice. Past performance does not guarantee future success. In some cases, managed accounts are charged substantial commissions and advisory fees. Those accounts subject to these charges may need to make substantial trading profits just to avoid depletion of their assets. Each Commodity Trading Advisor (“CTA”) is required by the Commodity Futures Trading Commission (“CFTC”) to issue the prospective clients a risk disclosure outlining these fees, conflict of interest, and other associated risks. A hard copy of these risk disclosure documents is immediately available upon request. The full risk of commodity futures, options, and forex trading cannot be addressed in thisrisk disclosure statement. No consideration to invest should be made without thoroughly reading the risk disclosure document. The CFTC has not passed on the merits of participating in any of the preceding programs nor on the adequacy or accuracy of the disclosure documents. Other disclosure statements are required to be provided to you before an account may be opened for you. Past performance is not necessarily indicative of future results. Trading futures and options involves substantial risk of loss and is not suitable for all investors. There are no guarantees of profit no matter who is managing your money. You should carefully consider whether commodity futures are suitable for youin light of your financial condition. An investor must read and understand the manager’s current disclosure statement before investing.

The post Benjamin Franklin and the S&P 500 first appeared on JP Fund Services.

The post Benjamin Franklin and the S&P 500 appeared first on JP Fund Services.

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