Jan.2020 (Monthly Report)

January 2020 (Monthly Report)

Dear Copiers and Followers,

we started the year 2020, (more precisely the last week!), with a spike of volatility that reduced our monthly profit from above 3% to about - 0,8% in a matter of 6 hours.

The reason of this drop is the aggressive investment of part of the cash we produced cashing the profits generated from our stocks into VXX with an aggressive move in order to take advantage of the spike in volatility.

Figure 1 shows the structure of the portfolio we are using to begin the month of Feb. with record low stock holding (about 33%) and record high ETFs holding composed by defensive and a large part of VXX, the ETF which tracks the VIX available on eToro.

Figure 1: PortFolio structure 31/01/2020

Despite the drop, I think that the portfolio is well positioned and will generate good returns as soon as the panic on Wall-street begins to fade and the VIX begin to fall back.

In a previous technical analysis of the SP500 and the Nasquad100, I explained why a correction was long due and we were drastically reducing our exposure to stock and moving part the of the cash into Bonds (TLT) and gold miners (GDXJ) in order to defend our gains.

My experience teaches that the VIX might keep rising for a few more days or weeks, but once it peaks, it will probably begin to drop quickly, that will generate most of our gains during the next month or two.



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The graphs and prices shown in this analysis were taken using as a source www.etoro.com, the platform I am using for my trading as DanieleTrader.
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