The TPP strategy of the month. The trackers win the day.

A Great Month to be long Everything

We pride ourselves on building absolute portfolios which aim to perform regardless of market direction. This is a great tool to have, especially when markets are stagnant. However, sometimes the market just goes up and the answer is to be long long long.

November was such a month. The only problem traders have is they don’t know which months of the year will be bumper ones for stocks until the month has ended.

Therefore, the only trading strategies on TPP that will catch every one of those months are the trackers. At the heart of a portfolio, it is always worth having something that will simply track up and down, guaranteeing all of the ups, but also sadly, all of the downs. This is just the nature of the market.

So, with November having been a month to be long, it is no surprise that our ‘Strategy of the Month’ is a long-only tracker, in fact, the top 5 are all trackers.

Europe’s stocks sadly did not follow the U.S. in November. The French CAC 40 tracker actually fell due to political turmoil in France which has been suppressing the market across the channel for most of the year.

The TPP German DAX Tracker eked out a gain of 3.4% which helped the TPP Europe 600 Tracker keep its head just above the water with a small profit of 1% for the month.

The TPP FTSE Tracker climbed 3.7% due to its defensive nature as the Russian conflict appeared to escalate earlier in the month.

The real winners in November were the U.S. trackers as the S&P 500 climbed 5.73%, the Dow Jones Industrial Average jumped 7.54% and the Nasdaq Composite closed 6.21% higher for its most positive month since May.

In turn, this led to bigger than market gains for the TPP trackers. Here are this month's top performers:

Recently, a host of factors have pumped up investors’ sentiment for stocks in America.

The presidential elections concluded with Donald Trump definitively securing the top seat in the White House. That erased any uncertainty, which investors don’t like. Also, Trump favours the stock market, tax cuts and deregulation, which investors love.

The U.S. economy grew at a 2.8% annualized rate for the third quarter. Even though gross domestic product is forecast to be 1.31% in the fourth quarter, according to the St. Louis Fed nowcast, that still denotes an expansion — a stark contrast against nagging fears that a recession would strike the economy.

Slowing growth even has a silver lining. It gives the U.S. Federal Reserve more incentive to cut rates a second time this year at its December meeting, which would stimulate economic activity.

With December now underway, it’s time to look to the year's end. Many traders will be defensive of profits, but some will look to finish the year in a positive fashion. Whatever happens, it is likely that the trackers will take the top spots this year.

In a year where everything goes up, the trackers will always win but will 2025 be so kind to the American equity market? Who knows. It certainly isn’t cheap, but then when has that ever stopped the Americans from buying!

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Building your TPP foundations:

Our trackers (both whole market and structured product versions) are a great way to build the foundations of a TPP portfolio. Combined with our Long or Flat strategies, as a long term growth tool they are very hard to beat.

Although the trackers dominated in a bullish market climate in November, a special mention should be reserved for the LOF strategy FTSE Tech Entry. Alongside Cambridge Futures, this is becoming very popular with our clients.

As an investor, if you can build your TPP foundations with our leveraged trackers (built to yield 1 .5 x benchmark performance) and our Long or Flat's you'll build a long term portfolio that is very hard to beat.

Our third tactic we employ is our more active strategies which have been less successful this year (looking to short sell the markets), which should be used as a speculative edge to one's portfolio. They take on more risk, witness more volatility, and over the longer term may well yield the highest returns. However, we would encourage you to build your foundations first.

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Combined, these 3 tactics can assist you to build you an 'all weather portfolio' that is diversified and robust.

If you would like to find out more, please contact our team.

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Have a great weekend.

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Past performance is not a guarantee of future results. All investments involve a degree of risk, including the risk of loss.

Graphs, charts, and tables are provided for illustrative purposes only. Investing is subject to market risks. Investors acknowledge and accept the potential loss of some or all of an investment's value.

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