The theme for the month was volatility. A couple of ETNs cratered as a result of the high volatility causing investors to lose significantly when using these levered products. “We sincerely apologize for causing significant difficulties to investors,” Nomura said. Credit Suisse stated “investors who held shares of XIV had bet against at volatility at their own risk. It worked well for a long time until it didn’t, which is generally what happens in markets”. Caveat emptor.
During the month, the S&P index dipped into correction territory before rallying to close the month down 3.89%. My portfolio sympathized with the index closing down 5.53%. I never hit correction so my peak drop was less but I also failed to recover as quickly. Probably an area to perform a root cause analysis on at some point. Following back-to-back monthly losses against the S&P, I’m down 3.44% to start the year. Continue reading