If you’ve read February’s newsletter you will be well aware of the market rebound in January.
The worst December for nearly 90 years was followed by the best January in 30 years. This point was illustrated beautifully in the latest heatmap where January's upward momentum is the complete inverse of December’s risk-averse slump.
What it means is that the market is now roughly back to just below where it was at the start of December. Those who’ve sat on the sidelines in cash haven’t missed much but the bulls are now trying to push the market higher, despite the initial resistance.
When it comes to the BOTB this month there has been an increase in exposure to equities, which you’d perhaps expect, but the increase is not radical. The 80-20 Investor algorithm factors in longer-term momentum, not just one-month momentum, so it looks for established trends.
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