How Rivkin Global benefits in falling markets

How Rivkin Global benefits in falling markets

With fears of a Greek exit from the Eurozone heightening, and weak economic data flowing from the US, markets have certainly been spooked in recent weeks. In light of the market’s recent sell off and the big spike in volatility, it has been incredibly comforting being able to offer Rivkin members a product that can take both a positive or negative view on financial markets. Rivkin Global enables members to take advantage of global markets and make money not only when the market is rising, but when it is falling too... which is just as well in recent weeks.

Only three weeks ago, the AUD was trading above US$1.03, and today it is trading at US$0.976, a huge fall in such a short space of time. Spot gold was trading at US$1663 an ounce, today it is trading at around US$1560. Oil has dropped from US$106 a barrel to US$90.50 a barrel, and importantly, the S&P/ASX 200 index has fallen over 300 points (~8%) in that time!

Standard equity investors who can only buy stocks, and hence profit only in rising markets, can’t do much in this environment, other than clench their teeth and hope for the storm to pass quickly. But at Rivkin, we're not concerned about equity headwinds. Rivkin Local's equity strategies focus on high yield and event-driven trades on the local market. Yield is currently in high demand due to falling interest rates, and our event-driven trades are largely unaffected by the current market woes. As a result, since the beginning of May when the market became vulnerable, Rivkin Local's Model portfolio has returned 2.2%, while the All Ords Accumulation Index has returned -7.8%, so we've strongly outperformed.  

Rivkin Global, however, can directly take advantage of falling equity, commodity and currency prices by being able to short sell those specific global instruments. Rivkin Global has recently had many open trades that have been benefiting from the prevailing weak equity markets and risk aversion; for example, we have been long the US dollar, short US equities, short oil etc. And as a result, the product has performed phenomenally well. 

Since its inception in December 2009, Rivkin Global has delivered a 70.9% profit. We started on 1 December 2009 with a $50,000 model portfolio and at today’s date, this has grown to $85,465.11 (inclusive of brokerage, but not financing charges).

In the same time period, the S&P/ASX200 (Australia’s benchmark stock index) has fallen 13.7%! So that same $50,000 invested in the S&P/ASX200 would now be worth $43,150 before brokerage. And cash... well, assuming a 30-month term deposit at the December 2009 prevailing rate of 6.8%, compounded, that $50,000 becomes $59,236.81.

It’s not difficult to see how following our advice, and being able to trade globally and take advantage of falling markets, can greatly enhance one’s ability to outperform. Please contact us on 02 8302 3600 if you'd like more information about Rivkin Global.

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DISCLAIMER: Rivkin aims to provide clear and simple information to those visiting our website. If any part of this disclaimer does not make sense, please phone Rivkin and ask to speak with a member of our Dealing and Relationship Management Team. Rivkin provides general advice, securities and derivatives dealing services and accounting administration services. Rivkin does not provide advice that takes into account your, or anybody else's, investment objectives, financial situation or needs. We strongly suggest that you consult an independent, licenced financial advisor before acting upon any information contained on this website. Investing in and trading securities (such as shares listed on the ASX) and/or derivatives (such as Contracts for Difference or 'CFDs') carry financial risks. CFDs carry with them various additional risks that differ from more simple securities such as fully-paid company shares. Some of these risks include not owning the underlying instrument from which a price is being derived, settling trades 'over the counter' with a financial institution rather than on a stock exchange, and using leverage to gain access to trades that may have a higher face value than your initial deposit. This risk of leverage means that it is possible to lose more than your initial investment. Our aim is to create more life choices for our clients, which means improving the wealth of clients throughout many market cycles by nurturing a relationship spanning many years. If you are not comfortable with your understanding of the risks involved before using a Rivkin product and service, please contact our office to seek further information or a Product Disclosure Statement, or make an appointment to sit with one of our friendly financial experts. It is in our interest for your Rivkin experience to be a rewarding and comfortable one. Rivkin is a trading name of Rivkin Securities ABN 87123290602, which holds Australian Financial Services Licence No. 332 802.