Good evening. Markets closed on an up note, and interest rates are like bumper cars. Commodities, currencies, stocks, bonds...everything is in motion. Truth is, our model called today as a risk-on day, and the best portfolio had only 35 stocks, whereas the day before it was 65 stocks.
Today, we are going to try something different. Wish us luck, and we will report on our results:
1. We added many ETFs to our run in the areas of the US Dollar (long and short), commodities including a bitcoin fund, passive US stock indices, a short stock index, and some VIX related ETFs. We tried to ensure they were all large, liquid and heavily traded.
2. We raised the risk-free rate again back to 4.7%. Why? The 13-week UST bill went up a bit today. Also, there are now bank accounts, FDIC insured, that are paying 5.0%. So, your risk-free rate, at least up to $250k FDIC insured, is 5.0%. We split the difference and hold it at 4.70%, which is roughly what you make, bond equivalent yield, if you go to treasurydirect.gov and bought the last 13-week issue on March 13, 2023.
Finally, on a technical note we removed our matrix-based solvers (again) to speed up the run. Each one of them takes too long, and is not giving a very good answer when compared to our custom heuristic solvers. We have ideas on how to accelerate those, and improve our D-Wave Systems results, but that will take time we did not have today. Coding time.
Finally, want to say thank you to the market today. Our portfolio went up a little, and that makes us happy.
President and Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.
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Full-time investment advisor and student of the financial markets.