After coming under heavy pressure in late 2018, global stock markets have been supported by a number of factors in recent weeks. The US stock indices in particular have rebounded strongly, with the S&P 500 index climbing close to 8% in January, its biggest monthly gain in decades.
The labour market continues to show signs of being in fine fettle — Friday’s employment report showed that US non-farm payrolls grew a whopping 304,00 in December, almost doubling expectations, though wage inflation rose just 0.1%, a curiously benign outcome considering the signs of strong demand.
The Fed also sounded rather dovish last week in its post-FOMC statement, characterising inflationary pressures as ‘muted’ and asserting that it will be ‘patient’ in determining future adjustments to its target for the federal funds rate.
Furthermore, US corporate earnings have been encouraging, with Facebook reporting outsize profits, part of a wider trend of strong performance amongst American corporations as whole — roughly two-thirds of companies that have reported so far have beaten the consensus estimate of Wall Street analysts.
Today’s top trader is called Sanvi, someone that we last caught up with several months ago, when they were in the middle of a string of winning months. They went on to finish up with a strong year as a whole in 2018 and they have begun 2019 on a similarly strong footing.
This is how their performance looks at the summary level:
The growth in profit is the first encouraging thing to talk about. Back in October 2018, the overall profit stood at just over 5.5% and they have managed to swell that to 9.68%, so things have continued to move in the right direction.
Another point of encouragement is that the maximum drawdown remains unchanged from its previous level. At 19.24%, this is still on the large side considering the size of the overall profit, but given they have placed around three times as many trades as the last time we looked, this suggests they have not upped the risks they have been taking. This is further backed up by the risk score staying static at 2 and the volatility percentage inching down to 2.56%.
Let’s see if monthly profit and loss values can help us shed any further light on this trader.
We can see from this how consistent their performance was over the course of 2018 — the number of winning months clearly outweighed the losing ones, leading to a yearly gain in excess of 10%, which is nice going. They’ve followed that up with a 1.91% gain in January. February has started in the red, but it is very early days for this month.
Let’s finish by looking at the make-up of their trades.
The composition of their asset allocation still has a balanced, diversified look to it, though the percentage of trades using the German DAX has crept up and now encompasses over 50%. So things are a little less diversified than before and there’s a hint of overexposure to the German stock market. The rest of their asset allocation appears to be well spread though.
In conclusion, this account is one that continues to enjoy a profitable run of form and the track record is starting to look fairly substantial. It therefore offers some appeal for those not daunted by the maximum drawdown.