ACCRE mid-month report

This is the point in the month when I usually discuss comparative metrics — particularly overall correlations with the S&P and the Sharpe Ratio (a measure of return versus risk).  Both are getting to be old stories.  ACCRE has a Sharpe Ratio of 6.2, compared to the S&P of 3.5 (lifetime since the beginning of the ACCRE fund).  No brainer — ACCRE dominates the S&P in terms of risk-adjusted return.  As we also know, ACCRE beats the S&P in total absolute return as well, over the life of the fund, and has a lifetime correlation of only 41% (this adding diversification to an overall portfolio).  Good stuff.  ACCRE does exactly what we want.

Now, on to the fun stuff.  I’m a fundamentalist, which is to say, I look at actual stock performance and company fundamentals.  However, like most market watchers, I’m not immune to some of the trading statistics.  One thing I look at occasionally are 50-day and 200-day moving averages, for ACCRE, the underlying stocks, and the S&P as a whole.  After all, there are other traders out there, too, and what they think about these stocks is not unimportant.  The results are interesting.

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Here, for example, is a chart of ACCRE and the S&P normalized from the first of the year (in other words, a dollar invested on January 1).  For the first 10 months of the year, more or less, ACCRE dominated the S&P.  That changed around the first of November, and now the S&P has performed somewhat better.  Both ACCRE and the S&P have solidly up-trending 200 day moving averages.  However, ACCRE’s 50-day moving average has flattened a bit — and even trended downward — since November.  Indeed, this picks up the fairly lackluster performance of REITs overall starting in the middle of the 3rd quarter.  Of course, if I was a persnickety chartist, I’d say this doesn’t matter yet, and wouldn’t worry unless and until the 50-day line got close to the 200-day line, and we’re nowhere near that.  Case in point, the December performance was stellar, and indeed took us back up into record territory.  Given the lack of correlation with the S&P, this was really all about real estate rather than simply a market halo effect.  Preliminary January results seem to bear out a continuation of this trend.

Anyway, that’s it until the first of February.  See y’all then!

Accre December Report

Well, we ended December on a high note — but that was true for investments in general.  Our ACCRE fund hit an all-time high — a dollar invested in ACCRE at the inception is now worth $1.68.  In case you’re curious, this works out to an average annualized rate of return of about 21.5%.  By comparison, a dollar invested in the S&P during that same period is now worth $1.37, and if that same dollar went into the S&P U.S. Property Index, it would be worth $1.28.

Dec 2019

As usual, we’ll be back mid-month with comparative metrics.  Of course, if and as we make portfolio changes, our subscribers will be informed immediately.