Dear investors,
APRIL UPDATE: RVM RETIREMENT NOW AT + 100.28 % PROFIT
April was slightly positive for the AEX, with an increase in value of +0.31%.
RVM Strategy did + 0.44 % and RVM Retirement + 2.29 %.
Both systems posted new all time highs, where the AEX index posted - 8.58% below the 2021 All Time High.
APRIL'S CONDUCT AND EXPECTATIONS FOR MAY
In retrospect, April was a relatively quiet month in the stock market, especially compared to the wild March.
The RVM systems work with algorithms, and it always follows the same protocol, so it can never be said in advance what the result will be.
Therefore, as is well known, there are no target returns at RVM Strategy and RVM Retirement: we would not know how a "target return" could coexist with strict and exhaustively tested risk management.
Risk management prevails and therefore preventing losses prevails. Not that it will always be possible to prevent losses, but we follow a tested methodology, which has also proven itself in practice for 4.4 years now.
WHY IS THERE SUCH A HEFTY OUTPERFORMANCE OF RVM RETIREMENT?
RVM Retirement is outperforming RVM Strategy so far in 2023.
What is the reason for that?
Indeed, in 2022, the system was almost 9% weaker than RVM Strategy.
Those who have read these monthly updates a bit more often already know that things are actually different. An annual return is not that interesting when it comes to longer-term interests. Those cannot be measured by an annual return.
Therefore, in our view, 2022 was precisely a great year for RVM Retirement, despite only slightly positive returns.
Why was that?
RVM Retirement has long-term holdings that, despite declines in value in 2022, still met our investment criteria. There was no reason to sell them.
In addition, short-term strategies were much more profitable in 2022 than in 2021. Because those gains were so good in 2022, the price declines in the long-term portfolio were completely absorbed.
Now, in 2023, RVM Retirement's long-term holdings are on the rise so far, hence its outperformance. But it's actually not as good a year as 2022, because the short-term strategies are yielding less so far in 2023.
SLIGHTLY LOWER PROFITS, BUT STILL PROFITS
There are two reasons for the somewhat lower returns from short-term strategies so far in 2023.
The first reason has to do with what the stock market "gives," after all, our algorithm has not changed. We never know in advance what the profit on a particular position is going to be....
The second reason is also temporary; it has to do with certain limitations in the new software we have been using for some time.
However, hard work is being done behind the scenes by the software engeneers to improve this, and then things will actually get better than under the "old" software.
THE OUTLOOK FOR THE MONTH OF MAY
This update is written on May 12, so we have already seen some turnover in May. On Amsterdam, it is again fairly quiet, continuing the picture of April. We have a general outlook that goes with the month of May: the dividend payments will largely have been after the month of May, and traditionally, stock markets may slump a bit then.
So we expect a fairly positive stock market in May for now, but some weakening toward the end of the month.
SUBSCRIBE TO OUR SYSTEMS; MANY HAVE GONE BEFORE YOU
If you are not yet a follower of RVM Strategy or RVM Retirement, you are welcome!
We do not expect the return picture in the coming years to differ much from the past four years.
Sincerely,
On behalf of Van Megen Systematic Trading,
Ruud van Megen