UPDATE RVM systems

Dear investors,

August was not so good for the AEX, with - 6.74%.

RVM Strategy was + 0.80% in August, RVM Retirement - 1.82%.

Those who have read these updates before know that "Retirement" is so named for a reason, it invests for the long term, and so there is market risk as far as those investments are concerned. The outperformance against the AEX at RVM Retirement in August was determined by a mix of fixed income holdings that outperformed the market in August, combined with a positive return on the momentum system, which works with the same calculations as RVM Strategy.

2022 DOES REPRESENT A LOUSY YEAR FOR STOCKS SO FAR, BUT...

... 2021 was one of the best years ever. So we can put things into perspective a little bit in that regard. Especially if we compare to the bottom of the Corona crash in 2020, which came out a whole lot deeper.

Nor is it basically the case that high inflation should be bad for stock prices, rather the opposite. With high inflation, savings are eroded, historically speaking, while equities in business generally protect against the monetary devaluation that comes with inflation.

Everything revolves around whether the higher prices can be afforded. If customers and end users refrain from buying because of the higher prices, then the normally simple laws of economics apply: prices will then have to fall, otherwise the market will be lost. Companies and private individuals who now ask for compensation because of high prices, especially for energy, must also realize that this distorts these normal market forces. Much more attention should be paid to the earning model of the State of the Netherlands. As often happens, politician Pieter Omtzigt asks the right questions in this regard. Why energy is more expensive in the Netherlands than in our surrounding countries cannot be explained. First of all, this should not be the case at all. Better than compensating certain parties - and therefore not others - is of course to ensure in advance that the problems cannot arise. Of course this should be done by imposing lower excise taxes on energy, but the people are not informed about this, that the State has no desire to lose the high income from excise taxes. Of course this is at the expense of the citizen, but no politician will explain that to you.

It is also clear that all countries need to get their defense in much better order. By defense in this case is meant not the military, but energy independence. It should never have happened that Germany became so dependent on Russia for energy supplies. That was unimaginably bad policy. States should work with worst case scenarios, and that clearly did not happen at all.

This is actually similar to building such a system as RVM Strategy. How long did it take us to develop this system? How many worst case scenarios were considered? It was about finding the best possible way to secure an asset, to protect it.

If this thinking is possible for an asset manager, why is it not possible for a country, for a state, to think in worst-case scenarios and adjust policy accordingly? There is a need to think much further ahead. That is quite possible. Great statesmen and important civilizations excelled at it. Get umbrellas purchased when the sun shines. Short-term policy is no policy.

Of course, the European Union doesn't help either. It is lethal if European citizens feel that there is nothing to be done about the decisions of "Brussels."

But back to the stock market, the prices.

SEPTEMBER TO DATE

This update is written on September 18, after the September close. RVM Strategy has remained profitable in September so far, while the AEX is lower for a second consecutive month. Still the June lows are not in sight, but the picture remains weak. RVM Strategy has no problems with that, but RVM Retirement does have market risk.

By the way, our long-term view on equities remains positive. The question is not whether stock prices will rise again and head for the all-time high of 2021, but when. That remains our main idea.

We conclude this update by noting that we believe we can continue to deliver RVM Strategy's profitability in any market. You are welcome as a follower!

Sincerely,

Ruud van Megen