Stock Indexes Whirlwind Tour

Since mid-July All TIME HIGHS the stock market has been in a whirlwind tour dropping almost 10% in 15 trading days and then a mixed recovery to today.

DIA = Dow Industrials SPDR
SPY = S&P 500 SPDR
QQQ = Nasdaq QQQ Invesco ETF
IWM = Russell 2000 Ishares ETF

The Whirlwind chart shows how $100,000 invested in the major stock index ETFs would have fallen and recovered during this time period. The DOW! The much maligned Dow Jones Industrial Average as represenbted by DIA has fully recovered to its all time high! 

Vista Commodity Basket up 11% in 1H2024

In the first half of 2024, the Vista Commodity Basket rose 11% while the comparable GSCI and Bloomberg indexes were up only 9% to 3% for the same period. 

Commodity benchmark continuously compounded returns normalzed toinception date of Vista basket, 4/30/2009 = 1000. 

Vista = Vista Commodity Basket
BCOM = Bloomberg Commodity Excess Return Index
GSCI = S&P GSCI Excess Return Commodity Index
Data Sources: barchart.com, bloomberg.com and spglobal.com

Note: Vista outperforms across the board! So, why Excess Return indexes? Because the Vista Basket is a simple basket of long-dated commodity futures contract price changes with no add-ons for interest or any other gains or charges. Excess Return indexes simarly include ONLY futures contract price changes with no add-ons for TBill collateral interest. The "Headline" or Total Return indexes DO include these credits.

While the Vista Basket beat the energy weighted GSCI and diversified BCOM, AGAIN, in the first half this is just a repeat of almost every rolling period since the inception of the Vista Basket in 2009. How did the Vista Basket do it this year? Look at the sector returns:

Vista's weighting of metals has given it the leg up on both the Bloomberg and GSCI commodity indexes. Individual commodities give a different picture:

These are good times for West Africa and other cocoa and coffee producing countries. We will see how long it lasts. 

ZFN vs SPY

Touted on LinkedIn: #ZFN #ETF units are up 22.6% Year to Date, compared with a gain of 13.92% for the S&P 500 Index 

Normalized performance since inception (12/10/2018 = 1000 ): Not so much!

ZFN = BMO SIA Focused North American Equity Fund ETF Series (ZFN.TO)
SPY = SPDR S&P 500 ETF Trust (SPY)
Source: finance.yahoo.com

Global X Funds - Emerging Markets Consumer ETF (EMC) vs SPY

 I don't get it! This fund is being touted on LinkedIn. WHO buys this underperforming stuff? 

Normalized continuously compounded return, adjusted for any distributions and splits, where the inception date of EMC, 5/16/2023,  = 1000

EMC = Global X Funds - Emerging Markets Consumer ETF 

SPY = SPDR S&P 500 ETF Trust

QQQ = Invesco QQQ Trust

Source: finance.yahoo.com

How many times do you have to prove it that paid managers cannot beat the S&P, let alone the QQQ??? Answer: Everytime!

Fundrise Flagship Fund versus the S&P500

While I admire Scott Galloway in many things, especially his "Prof G" and "Pivot" podcasts, I have questions about his personally touting/endorsing/selling the "Fundrise Flagship Fund". 

What is this fund? It's an LLC! Well here it is direct from the chatbot on the Fundrise website:

"Fundrise is not listed on a public stock exchange; instead, it operates a platform for investing in shares of its funds, which are structured as REITs and are not publicly traded. If you're looking for a stock symbol for Fundrise itself, such a symbol does not exist because the company's funds are not traded on public markets."

Sorry Scott, touting private investments to unaccreddited investors is irresponsible. Unsophisticated investors have NO place in underperforming illiquid investments. Of course anyone can buy real estate and almost anything else directly themself. But does anyone need an illiquid, non-public LLC to charge fees and lose money? Terrible returning private Venture Cap funds are usually the purview of billionaires.

Since this is NOT a publicly traded fund, information is hard to get and IMHO misleading, at best. As the website says: These publicly registered  [not publicly traded] funds are our largest and most diversified, and are akin to mutual funds of alternative assets.

Here's the best I could find from Fundrise.com:

Fundrise Real Estate Interval Fund, LLC

"During 2023, the Fund returned -11.79%, its third year of operations. During the same period the S&P 500® Total Return Index, a bellwether for the overall U.S. stock market, returned 26.29%..."

Fundrise Income Real Estate Fund, LLC

"The Fund returned 7.93% in 2023, its second year of operations. During the same period the S&P 500® Total Return Index, a bellwether for the overall U.S. stock market, returned 26.29%..."

Fundrise Growth Tech Fund, LLC

"...with the illiquid nature of the asset class... The Fund returned +1.53% during the year ended March 31, 2024. The Cambridge Associates LLC U.S. Venture Capital Index returned -2.53% in the third calendar quarter of 2023 and -0.47% in the second calendar quarter of 2023. The Fund returned 2.31% and -0.80% in those respective quarters."

Maybe this is not the big picture. From the Fundrise website itself , below may be the big picture (the SPDR S&P 500 ETF Trust - SPY added by me):

Who presents the returns of their client accounts*? How odd, how misleading and how dishonest is this? Even with these gerrymandered returns Fundrise STILL can't beat the S&P (represented here by SPY.

Conclusion: AVOID. Do not buy Fundrise funds.  

*Client account returns are NOT fund returns. Client returns depend upon when clients buy and sell. SPY client returns will vary significantly from SPY returns. I mean WHO just buys and holds SPY ALL the time? Nobody!

Why Can't Active Funds Beat the S&P? The Source of Return

Quick answer: they go flat or short. Either strategy is a loser. Why? The return of the S&P (and nearly ALL broad-based indexes) comes from a miniscule number of trading days that are very scattered and very unpredictable. The plot below shows the continuously compounded daily returns of SPY from its 1/29/1993 start date to 5/22/2024.

SPDR S&P 500 ETF Trust (SPY) closing price since 1/29/1993 adjusted for splits, dividends and capital gains distributions. Source: https://finance.yahoo.com/quote/SPY/

SPY has traded 7884 trading days or 31.28 years since inception. Here are the numbers:

CCROR = Continuously compounded rate of return (ln(day 2/day 1).

CAGR = Compound annual growth rate = sum of daily returns.

These are the returns from nonstop buy and hold for SPY from inception to 5/22/2024. These returns outperform 70% to 90% of all active managers, consistently, across nearly any time frame. See S&P's passive/active website here: 

https://www.spglobal.com/spdji/en/research-insights/spiva/about-spiva/

The total return of SPY (and QQQ and IWM, for that matter) is extremely sensitive to the top 10, 20, 100, etc. individual trading days. How sensitive is it? Here are the numbers:

The "Top" table shows how the SPY return changes when an active manager misses the top 10 SPY days. Just missing those specific 10 days reduces your return by 200 basis points (9.79% to 7.26%). Missing the top 20 days cuts you further and missing the 100 top days results in a sub TBill return!

Here are the top 10 and worst 10 days since inception for SPY:

Well what are the odds of that? Probably the chance of missing (or picking) the top 10 or 20 or any fixed number of top days is probably random but every day an active manager is OUT of the market, or worse yet, short the market, is another chance to miss a top day. Note that when tested for just random days, missing say 10 or 100 or 2000 random days (a much more likely scenario), there is much less effect on return.

Missing the "top 20 and worst 20" or any number of  like days also has a smaller effect on return. Returns only go up if you can miss the worst days and not miss the top days-a task as unlikely as any other. 

In sum, THE ONLY WAY TO GUARANTEE THAT YOU DON'T MISS TOP DAYS IS TO BUY AND HOLD.

If you can do it, more power to you, but public audited managers can't. 

How to Invest

 

How to Invest

An investment guide for everyone.

 

Investments are a form of spending but spending on SAVINGS. Savings for yourself, your future, your car, home, retirement, your family, your child or children’s future. 

 

Smart investing involves knowing your needs and goals, researching and MAKING good choices.

 

Needs and Goals

 

We are all unique. But while we all have some things in common: we each answer needs in our own way. Investment needs depend upon your stage of life. Needs and goals include your education, car, home, family, children’s education and retirement and a slew of goals specific to each. 

• For students, your job is school. Max out your education. Challenge yourself and take school seriously; your life will depend upon it. 

Take advantage of every wise opportunity but most importantly, avoid bad choices. NO “for-profit” schools or schools that advertise with promises. Go to community college if you must, use school counseling, government and agency programs/grants for low/no income students. Don’t sign student loan applications.

• 20s? Not a Student? Try and do what you love and whatever you make, SPEND LESS than you make. Take advantage of every opportunity, especially low/no income programs. Your library is your friend. MAX OUT your retirement plan at work and you’ll have thousands saved by your 30s. No work retirement plan? Change jobs or open your own IRA (Individual Retirement Account) at Vanguard or T Rowe Price² and MAX THAT OUT. Save for down payments on a car and home. Put your college and retirement funds into an S&P 500 index fund. Put your down payment savings into a money market account³. 

• For all adults-SPEND LESS THAN YOU EARN. Begin planning now, MAX OUT your retirement plan at work. Don’t neglect your basic needs to complete your education, avoid unwise debt and buy a home-a 30-year mortgage is your friend! No work retirement plan? Open your own IRA and MAX THAT OUT. If needed, still save for down payments. 

Buying a home may be the best INVESTMENT you can make. You not only INVEST your money but you LIVE in it and, as you pay down your mortgage, your home equity grows too! Mortgage payment is a form of forced saving and may be one of the best ways to accumulate wealth.

• For parents of newborns, get your child’s SSN right away and open a children’s account. Work with Vanguard or T Rowe Price to make the right choice for you. Investing in a S&P 500 stock index fund these first 3 or 4 years can triple your child’s assets! 

• For middle aged adults with children-kid’s college is looming and then retirement, no time to slouch now, you must juggle spending AND saving. With or without children, live your best life, make your best choices.  

• Near retirement? -You can be retired for 30 years or more, you need growth. Forget income, all income comes from principal or growth. Income funds UNDERPERFORM, buy and hold an S&P 500 Index fund (or Nasdaq 100 index funds, if you can stand it. 

Index fund declines are a COST! A price you pay for superior FUTURE returns. 

NEVER pay fees for a financial planner or broker commissions. Forget buying stocks, commodities, options and ESPECIALLY CRYPTO. These are all gambling. Don’t gamble until you have substantial income and can AFFORD gambling losses.

When it comes to insurance, buy only car and home insurance, and when you have dependents buy ONLY straight life insurance. Insurance has huge commissions and is NOT an investment.

Research 

Your library is your friend. Local, state and federal programs, agencies and non-profit organizations can be lifelines. Learn and know your choices, especially, what to avoid! 

 

WHO you invest with is as important as WHAT you invest in. Almost ALL financial professionals offer products you don’t need, with unnecessary complexity and with exorbitant, explicit or hidden fees. Throughout your financial life do not be lured BY and avoid almost ALL full service advisors, insurance salesmen (except when you NEED to insure your home, life or car) and stockbrokers. 

 

Good advice IS available but sadly without a good MBA one may not know what good advice looks like. In my opinion, for those NOT in the know, only a few investment firms truly exist to serve their customers: Vanguard and T Rowe Price are the major companies that I recommend. Call them, tell them your situation and they will give you excellent unembellished advice (no promises, no misrepresentations).

 

BEWARE ALL GET RICH QUICK SCHEMES. You already know this. As for bitcoin, the stock market, house flipping, etc. etc. these are all forms of gambling and totally depend upon your financial weight class. Choose wisely. 

 

Investment Choices

 

Just like spending, you have choices. Different investments have different risks. Time is your friend. Below is a table of investments ranked by risk, Risk is always a subjective measure-subject to your personality and financial weight class. Time is your friend and reduces your risk for retirement investments. Here’s one standard way to rank investments by risk:

 

Investment	Historical and  Estimated Rates of Return	Risk
Bank Savings	0.1% to 3%, 1%	Very low, FDIC insured
Money Market Funds	-1% to +2%, +3% on average	Very low
Bond Funds	-3% to +5%, +5% on average	Low
Home Ownership	-10% to +10%, +8% on average	Market risk
Stock Market	-20% to +20%, +8% on average	Market risk
Technology Stocks	-40% to +40%, 12% on average	Above Market
Bitcoin	-50% to +50%, no average	Very high

 

Stock indexes have risen over time and this is the major reason honest professionals recommend stock index investments for retirement and long term investors. There is no guarantee this will continue! But, for the last 200+ years, it has.

 

Stock indexes are NOT favored by investment professionals due to their very low fees. Some will lure you with no fees but offer to share in your profits. Again, at Vanguard or TRP, you won’t have to give up very low fees. 

 

Your investment life is just one part of your money life, social and family life. Make the most of what you have with your best possible choices. 

 

Why Vanguard or T. Rowe Price? I don’t work for them but in my experience, they are as good as it gets for investors of all weight classes.. I suggest you call them and once you get your bearings, then you can explore their websites. Their contact information is: 

 

Investor.vanguard.com 877-662-7447

troweprice.com 1-888-285-2612

Money markets have very low risk and are appropriate for short term investments where you can’t afford losses such as for a car or down payments.

 

Volatility is a fancy way of measuring how much an investment has fallen in the past. It does not predict how prices will move in the future.

Medallion Fund? Red Flags

May 10 the Wall Street Journal, when reporting the obituary of James Simons, called Simons "one of the most successful investors in modern financial history".  To be fair, MANY other sources make the same claim. How does anyone know this?

The Journal continues to claim: 

"Between 1988 and 2018, Renaissance’s flagship Medallion Fund produced gains of more than $100 billion and average annual returns of 66% before the firm’s unusually hefty investor fees. The annual gains were 39% after those fees ... Medallion years ago became a fund only open to Simons and his colleagues."

These claims and almost ALL claims made about the Medallian Fund come from ONE source, The Man Who Solved the Market, by Gregory Zuckerman (2019) which has an appendix claiming to show a summary of Medallion's performance data. Zuckerman and every other claimant tell stories of the epic security and closely guarded secrets including "ironclad non disclosure agreements" of Medallian and its owner Renaissance Capital. 

This table, as presented in a paper by Cornell Capital Group is far from the standard disclosure required of a publicly offered futures account or mutual fund. This table would be rejected as insufficient and misleading. The requirements for a valid disclosure document are found here. 

The red flags here are too numerous to list. The major red flags are:

• opaque trading methodology
• no public track record
• too consistent extraordinarily high up years
• NO down years
• fund only open to insiders
• public funds offerred by parent firm Renaissance Technologies: the Renaissance Institutional Equities Fund and Renaissance Institutional Diversified Alpha funds were both subpar performers and no longer listed by my broker. 

The WSJ claim of  "a performance that topped those of Buffett, Soros, Peter Lynch and other investors" is laughable! These are true investor giants with public, audited track records and funds that made their investors millions!. There is NO SUCH PUBLIC TRACK RECORD with the Medallion fund. Pro-tip: Bogle may have the greatest record and legacy of all, permitting average investors to earn superior returns!

The only other performance tidbit from the Cornell Cap paper is the claim 

"According to Robert Mercer, one of Medallion’s key investment managers, Medallion was right on only about 50.75% of its trades.". 

How odd is that? Not very. According to Microsoft's stockhistory function, as of today (5/13/2024) the S&P 500 ETF, SPY, was up 4,204 days out of its 7,877 day trading history or a win percentage of 53.37%. 

While Madoff falsely tried to show his methodology, he TRIED. Perhaps Simon DID make these returns - to his credit, as far as I know, he never made public claims - but the inability to replicate these numbers in his public funds should give all of us pause. There's no fear of missing out with a story like this. 

Vista Basket Beats

Here is the performance of the major commodity indexes since the Vista basket 4/30/2009 inception to the quarter ending 3/28/2024:

Normalized to 1000 = 4/30/2009

Continuously Compounded Returns

Vista = Vista Commodity Basket

BCOM = Bloomberg Excess Return Commodity Index

GSCI = S&P GSCI Excess Return Commodity Index

Sources: barchart.com, bloomberg.com, spglobal.com

Vista since inception is up roughly 50% while diversified nearby month BCOM and energy weighted GSCI recovered from a 50% decline and are roughly unchanged.

The Vista basket of fully collateralized long dated commodity futures contracts beats normalized AND 4 out of 5 rolling periods. What does this mean? 

Wild speculation, despite recent rallies, has been driven OUT of commodities. Commodities are now back in the realm of hedgers and trade by necessity rather than trade by choice. The specs are now in the domain of crypto and meme stocks where they belong. 

This is a good thing for commodities! Commodities are necessities of modern life and rational markets are welcome. If commods ARE rational, the friction of continuous rolls of expiring contracts may account for the higher returns of the long dated, single roll per year Vista basket. 

Why BCOM and GSCI? While there may be hundreds of published commodity indexes, these are the "headline" or benchmark commodity indexes. Why excess return indexes? Excess return flavors are pure commodity futures price indexes and therefor comparable to the Vista Basket. "Total Return" indexes include the returns of T-Bills presumed to be used for collateral in futures accounts. The Vista Basket is fully collateralized and TBill gains are not included in the basket calculation. 

The Surprising Returns of the Euro Stoxx 50 - No AI is used in this post.

I'm surprised because I haven't looked at this index for years! Too much focus on the FTSE, CAC-40 and DAX and I missed the bigger picture-and a bigger picture it is! Here's the normalized performance of the nearby Euro Stoxx 50 futures contract (nearby symbol FXM24) compared to the E-Mini S&P 500 futures contract (nearby symbol ESM24) since the 6/22/1998 inception of the FX and back adjusted for rolls:

FXn = Nearby Euro Stoxx 50 back adjusted
ESn = Nearby E-Mini S&P 500 back adjusted
Source: barchart.com

Normalized where 6/22/1998 (FX inception date) = 1000

WHAT a surprise TO ME (I'm sure smarter managers have known this all along). Under almost all conditions, given almost any holding period, FX BEATS ES! FX beats ES in 15 of the 26 years of its existence!

Based on the above, it is ok to overweight the Euro Stoxx 50.

Japan Nikkei All Time High Is NOT What It Seems - No AI Zone

With headlines screaming Japan's Nikkei 225 stock index hitting ALL TIME HIGHS, you might think this actually means something! The prior all time high was December 29, 1989, so basically the Japanese stock market went NOWHERE for 34 years!  The chart looks even worse! Using the 1989 year-end high as the start date and normalizing to 1000, with other world indexes added for good measure, this is what we get:

S&P 500 = U. S. S & P 500 STOCK INDEX

DAX = Germany DAX PERxFORMANCE-INDEX
HSI = China HANG SENG INDEX
CAC 40 = France CAC 40 INDEX
FTSE = U.K. FTSE 100 INDEX
NIK = Japan NIKKEI 225 INDEX

The numbers are no better:

While the Nikkei 225 has had a good year, up 27% , every prior rolling period it has underperformed the S&P. Ok, the 10 year rolling return, from 2014 to 2024, at 9.4% is close to the S&P's 10.3%, but over the long term the Nikkei is DOWN (all returns are continuously compounded). And Japan is not alone. Everywhere else in the world lags the U.S.. (Kudos to France for a competitive 3 year cagr!)

WHY IS THIS? Some answers seem obvious. Brexit kneecaps the U.K AND the E.U! And China going rogue doesn't help the Hang Seng. Germany is steady but consistently behind the United States. So what's going on here?

I think it's Econ 101 and Ricardo's competitive advantage, a touch of Adam Smith plus the rise of equality in America (admittedly, now under fire). 

The answer is labor and capital and culture. The U.S. has more mobility of capital AND labor than any nation in the world. We have fewer capital restrictions than almost any other economy. We also have the greatest mobility of labor in the world. 

While some don't want to acknowledge it, the U.S. has open borders - and this is a good thing! Immigrants counter the crushing effects of ageing population, fuel the demand for labor and propel American growth. U.S. has the weakest caste system in the world (read DEI -diversity, equality and inclusion) which contributes to the mobility and American prosperity. 

To the extent isolation, fascism and bigotry are rising, these advantages are at risk. No society is perfect but the question was not perfection, it was why does America outperform?

SPY All time Highs -What's a Long-Term Investor to Do? NO AI WAS USED IN THIS POST!

On its 1/19/2024 $482.43 close, the SPY has finally closed at a new ALL TIME HIGH. It has taken 746 trading days or 2 years and half a month for the market to get back to square 1!

SPY = SPDR S&P 500 Exchange Traded Fund

Source: Yahoo finance

Looking at the above SPY chart since inception, note that for much of its life SPY was AT or NEAR its all time highs! Almost 40% (3038/7800) of all trading days were NOT in major drawdowns. All time highs are not that special for SPY (or DIA or QQQ, for that matter!). What is of most interest to buy and hold investors, is not the highs but the lows -- the frequency, timing and duration of drawdowns. 

Source: Yahoo finance

For instance, the SPY was down almost 60% in March 2009! It fell almost 50% in 2002 and touched minus 25% in its most recent 2022 drawdown! Below is the list of seven major SPY drawdowns since inception:

Source: Yahoo finance

With the market reaching all time highs in the last week, WHAT'S AN INVESTOR TO DO?

One option is to do nothing! A very Bogle-like answer. Admittedly 7 years may be a long time to wait for recovery but thankfully, a 7 year wait has only happened twice in SPY's 30-year history. The S&P 500 index had only two longer waits in it's 97 year history!

Source: Yahoo finance

The 25 year drawdown of the Great Depression was a little much. And the Go Go Nifty Fifty collapse was right in line with SPY's drawdowns. The solace here, if there is any, is that nobody did any better than the indexes anyway. Still true today.

As for another plan of action, what about insurance?

The most basic kind of insurance is what option* traders call the "Married Put". This is when the stock and its at-the-money put are held in the same account.  Puts give you the right to sell your stock any time before expiration at the strike price. So, if the stock falls below the strike, you can always sell it at the higher strike. 

Let's look at the cost and returns of holding SPY WITHOUT versus WITH insurance. 

Source: Schwab thinkorswim

The above table is a record of being long the SPY and buying the one year put on the last trading day of the year. SPY puts began trading in 2005, so, this is a complete record. 

For example, on the last day of 2005, SPY closed at $123.51 and the nearest 12/15/2006 $125 put closed at $5.70. The premium cost 5% of SPY's price! So after a year, SPY closes 2006 at $141.62 for a gain of 13% and the put expires worthless! If you bought the insurance, your net gain would only be 8% (13% SPY - 5% Put). 2006 was not a good year for insurance. 

As you look down the table you will see that most years, the put would expire worthless and just drag down the SPY return. Of course, 2022 was different. One way to look at this is to compare stock insurance to any other insurance. The one year married put premiums averaged 8% since inception. Is it worth 8% of your house value to insure your house for a year? Or your car? Your car, maybe yes. Insurance on  a $10000 car may cost $800. 

In sum, insurance would cut the SPY annual returns by half to roughly the rate on Treasury bonds.  If you really think we are on the heels of a great depression, with two world wars in twenty years, maybe so. In today's world, maybe not so. 

Why SPY? Is SPY the market? No and yes. SPY, which tracks the S&P 500 index-roughtly 80% of the market, is the world's largest, most liquid, least expensive and lowest tracking error exchange traded fund. 

*Options are a complex subject with ton's of online resources that may or may not be worth study. Why not? There's too much misinformation in many option claims and, historically, option mutual funds (arguably the richest and smartest option traders), sadly, underperform the S&P. 

2023 Long-Term Stock Commodity and Cash - Asset Class Returns

Comparing the annual returns of  SPY, the largest S&P 500 Exchange Traded Fund, PCRIX-PIMCO Commodity Real Return Strategy Fund, the largest, oldest commodity fund and 13-week Treasury BillS -- we get the following results:

These three investments have the enormous advantage of being some of the lowest cost investments available to both large AND SMALL investors. There is no need for fees to financial planners, fund managers and the like. They are available at almost any broker at nominal commissions.

Note: these are not the ONLY investments representing stocks, commodities and cash, but they are among the largest and lowest cost. 

2023 Vista Beats - Commodity Index Performance Lags

Commodities failed to impress in 2023. At the same time, the Vista Commodity Basket beat the Bloomberg and GSCI excess return indexes by double digits.

Normalized commodity index returns where 1000 = 12/31/2022.

VISTA = Vista Commodity Basket

GSCI ER = S&P GSCI Excess Return Commodity Index

BCOM = Bloomberg Excess Return Commodity Index

Source: barchart.com

Rolling Compound Annual Growth Rates as of 12/31/2023

Vista Commodity Basket inception date = 4/30/2009

While the Vista basket of long term commodity futures contracts posted a nominal 2% gain, the diversified BCOM ER and energy weighted GSCI ER both sufferred losses in 2023. The headline indexes' reliance on rolling contracts may be the source of the performance disparity. Vista's long dated, true price discovery futures contracts dampened front month losses and actually eeked out a gain for the year. Over long terms, the Vista basket has doubled or tripled the gains of the headline indexes. 

Normalized performance where 1000 = 4/30/2009

In 2023 energy took the hit with WTI crude oil falling from $90 to below $70 a barrel, and the unleaded gasoline contract declining from above $2.50 a gallon to under $2! Ags and metals stayed roughly the same.  

Outlook

The epidemic and war induced commodity rally may be past best days. As the supply chain effects from epidemic fade, wars (in Ukraine and the Middle East) become the remaining catalysts, if any, for further commodity increases. Otherwise, I expect the long term forces of ageing population deflation will draw down commodity markets. 

Why excess return indexes? The Vista basket is a pure commodity futures basket with no adds from collateral interest. ER indexes reflect the same. Total Return (TR) indexes include interest gained on implied futures collateral.