Newsletter end of May 2021

For the month of May 2021, the Enhanced Permanent Portfolio strategy-account added +1.74% which was better than the 100% equity ACWI index (All Country World Index) which was only up by 1.47%. The significant difference however was the much lower volatility of the EPP strategy with a max drawdown of 1.34% versus 3.83% for the ACWI on May 12. Fortunately this intermediate drawdown was only of short duration.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 79 306 11 60 / Email

Newsletter end of April 2021

For the month of April 2021, the Enhanced Permanent Portfolio strategy-account added +2.48%.
In April, Gold (+3.5%) and Treasuries (+2.5%) finally stopped their huge decline they had since last summer. Equity had a good month with the S&P500 up +5%.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 79 306 11 60 / Email

Newsletter end of March 2021

For the month of March 2021, the Enhanced Permanent Portfolio strategy-account lost -0.61%.
In March, Gold (-1.15%) and Treasuries (-5.25%) continued to decline. Equity had a very good month with the S&P500 up +4.5%. Year to date Treasuries are now down by -13.9% and Gold down -10.35% while the S&P500 is up +6.35%.
It is important to point out, that the goal of this strategy is not to outperform the stock market during rallies, like we see it since some months, but the goal is to achieve long term returns with 2x to 3x lower risk (volatility).
It looks like Treasuries have reached a bottom after consolidating 20% since their August 2020 culmination. Due to again quite attractive yields they should from now on act again as a reliable hedge against market downturns and again add a positive contribution to the strategy performance.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 79 306 11 60 / Email

Newsletter end of February 2021

For the month of February 2021, the Enhanced Permanent Portfolio strategy-account lost -1.17%.
February, Gold and Treasuries continued to decline, and both are now down by about 10% since beginning of the year. The good equity and premium returns could not fully compensate this draw down. Gold and Treasuries are now both down about 20% since July 2020.

This consolidation is one of the biggest safe-haven asset consolidations during the last 30 years, however after the huge gains, Gold and Treasuries posted during the Covid crash of last year, this consolidation is necessary to reestablish the ability of the hedge to act as a buffer during the next equity correction.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 79 306 11 60 / Email

Newsletter end of January 2021

For the month of January 2021, the Enhanced Permanent Portfolio account lost -1.8%.
January was a difficult month with all three asset classes declining. Treasuries declined -3.49%, Gold -2.86 and Equity (S&P500) -0.8%. This translated in a loss of 2.4% for the underlying strategy. Option premium income added a positive +0.6% to that loss so that the strategy ended with a loss of -1.8%.
It is quite rare that all three asset classes decline together, because most of the time they show negative correlations to each other and money which flows out of one asset will flow into the other. All three assets declining means that investors go to cash. In general, the save haven assets Gold and Treasuries are still consolidating after the huge jump during the March 2020 Corona crisis and investors are still shifting money into the riskier equity assets.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 44 515 48 00 / Email

Newsletter end of December 2020 (full year report)

For the month of December 2020, the Enhanced Permanent Portfolio account added 2.09% and ended the year 2020 with an excellent performance of 19.74%
Even more important than this performance was the exceptionally low volatility or risk of the strategy during this very volatile year. Below you can see the Interactive Brokers Risk Analysis which shows a downside deviation (or risk) of only 0.48% which is about 10x lower than the downside risk of the two benchmarks (ACWI and DJ600).

The reason for this low downside risk was the fact that the strategy invests a bigger part in so called “safe haven” assets (Treasuries and Gold) and only about 1/3rd of the portfolio is invested in “riskier” equity.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 44 515 48 00 / Email

Newsletter end of November 2020

For the month of November 2020, the Enhanced Permanent Portfolio account added 3.07%.
November was an incredible month for equity with performances of more than 10% for most developed markets. After the US elections, investors felt more secure and continued the rotation away from safe haven assets (Gold and Treasuries) into riskier equity. General market volatility came also slightly
down, which allowed us to slightly increase the equity exposure of the strategy.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 44 515 48 00 / Email

Newsletter end of October 2020

For the month of October 2020, the Enhanced Permanent Portfolio account lost -1.39%.
October was a difficult month, with all major asset classes going down. The Stoxx600 dropped -5.2% and the S&P500 was down -2.5%. Unfortunately also our safe haven assets declined, with Gold declining -0.5% and Treasuries declining -3.4%.
This decline of all major asset classes means, that many investors just went to cash until the November 2. US presidential elections are over. Most of our decline however was due to again increasing volatility which had a negative effect on our option based long positions. This losses however will be recovered quickly, if volatility drops. Hopefully this should be the case, once the US presidential elections are over.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 44 515 48 00 / Email

Newsletter end of September 2020

For the month of September 2020, the Enhanced Permanent Portfolio account returned net -0.16% which however was still much better than equity performance.
In September only Treasuries showed a +0.77% positive performance. Gold (-4.17%) and the S&P 500 (-3.74%) had negative performances. Altogether, the base Permanent Portfolio ETF based strategy had a -1.6% negative performance in September. This negative performance however was nearly offset by the good +1.44% option premium received due to still high volatility.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 44 515 48 00 / Email

Newsletter end of August 2020

For the month of August 2020, the Enhanced Permanent Portfolio account returned net -0.54%.
Gains in Equity got overcompensated by weakness of the US Dollar, and increasing volatility in fixed income, equity, and gold derivatives. For the coming month, we are maintaining the allocation and implementation method.

Your Rational Invest Team
Walter Baumann / Frank Grossmann / Thomas Ritter
Tel +41 44 515 48 00 / Email