Dear investors,
I would like to share with you the performance of our RVM Systems in July 2024.
The AEX index experienced a slight decline of -0.35% in July. Our RVM systems performed as follows:
Our classic systems, RVM Strategy and RVM Retirement, therefore outperformed the index. However, it is important to note that these results were mainly driven by short positions that had already been taken in June. These short positions led to poorer results in June, but made a positive contribution in July.
Although RVM Analysis posted a negative result in July, we are satisfied with the underlying performance. The weak results were mainly due to a few long-term fixed positions that declined this month. At the same time, active trading in RVM Analysis was profitable.
It is important to emphasize that long-term positions are not sold because of one weak month. The price declines affected stocks that have generated significant gains in recent years, making the short-term decline less relevant. As long as active trading remains profitable and the portfolio has a healthy composition, we consider July to be a good month.
July was an eventful month, with both a new all-time high for the index and a sharp correction, followed by a recovery towards the end of the month. RVM Strategy benefited from a short position that was unsuccessful in June but proved successful in July.
RVM Strategy outperformed RVM Retirement because RVM Retirement also had long-term positions in its portfolio that declined in July. Active trading was virtually equal for both systems, but the differences arose from the long-term positions in Retirement.
In July, several price target positions reached their targets after having been held in the portfolio. Generating price targets is a core aspect of the algorithm that forms the basis of both RVM Strategy and RVM Retirement. Although price targets also play a role in RVM Analysis, this system has a greater focus on long-term portfolios, which carry more weight than active trading.
RVM Strategy came out on top this month, thanks to the absence of long-term positions in the portfolio. This system is market neutral, which means that it often performs better in a falling market.
At the time of writing (August 19), August has proven to be a very eventful month, with a flash crash on August 5, followed by a remarkably strong recovery.
Although we cannot predict the future, we remain positive about the AEX in the long term. We expect the index to eventually reach new all-time highs. The price movements in August so far do not change this expectation. We see two possible scenarios for the coming months: one in which the AEX reaches a new all-time high before a larger correction, and a second, more negative scenario, in which the index will not reach any new highs for the time being.
We use these scenarios solely to gain insight into our position in the investment cycle, not as a trading guideline. Positioning is determined based on our methodology, and we strictly follow the trading rules dictated by our algorithm across different time frames.
If you are not yet a follower of RVM Strategy, RVM Retirement, or the new RVM Analysis, we warmly invite you to join us. Most investors who have ever decided to follow our systems continue to do so in the long term.
Sincerely,
Ruud van Megen
On behalf of Van Megen Systematic Trading