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  • Mohammad Naqvi

Recap of 2019

The end of the year is a time to reflect and plan for the year ahead.

I would like to start by thanking God, who enabled us to learn valuable lessons from 2018 and implement them in 2019. As a result, our performance surpassed our expectations.

If one looks at the 2019 end of the year performance of SP500 (+28.9%), he/she would guess that it was a undoubtedly a good year to be in the stock market. However, for individuals who actually invested and were following economic developments and news media, 2019 was not an easy market to invest.   

In 2019, some individuals made profits at the beginning of the year and others were more successful towards the end, but very few were able to beat the market. As a result, 2019 was yet another year when Hedge Fund closures surpassed new openings. 

To better analyze year 2019, we can divide the year into three parts:

  1. Beginning: 2019 started with a big rally through April. For the first two months of this rally, very few people got involved because of the fear of a bear market. As soon as the market reached higher levels and sentiments got lofty in April, the market started a correction in May.

  2. Middle: This correction and sideways action continued from May through September. This period was full of news about the inverted yield curve and how a recession is imminent. As a result, most of the investors fled the market, bringing the asset flows out of the stock market at a multi-year high (numbers not seen since the 2008-09 Great Recession).

  3. End: This correction was followed by a sharp 3-month (Q4-2019) rally, which was again missed by the average investor, while many tried fading and shorting the rally, only to lose money at the end.

In 2019, our strategies (Conservative and Aggressive) performed very well. Want to learn more about just how significant our performance was? Contact us!  

No one can guarantee performance, and we have seen that 2018 was a negative year (the first negative year for the portfolios out of real-time and back-testing data). However, we strive to continually learn and improve. 2019 performance was driven by the lessons that we learned in 2018. 

For reference, Penta Capital follows a simple 3-step process: 

  1. Evaluate clients’ needs & agree on investment strategy (sign Advisory Contract) - may be done in person, via e-mail, or over the phone

  2. Open a brokerage account with Interactive Brokers (link to be sent to the client)

  3. Fund the brokerage account. Investments start.

Fee Structure

The actual fee depends on AUM and investment goals. 

Conservative:

  • AUM Based: 1-3% of AUM

  • Performance-based: 1.5% of AUM and 20% of Performance

Aggressive:

  • AUM Based: 3-5% of AUM

  • Performance-based: 2.5% of AUM and 30% of Performance


Please feel free to contact us with any questions.

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