Falling equites - rising portfolio

Hi!

What a week... Volatility is creeping back again after some tranquil months in the start of the year. It sure doesn't look sexy out there - equities are still somewhat contained eventhough S&P are tumbled to four-month low and Eurostoxx even worse... But when lookin to rates then you get some perspective. German 10-year bond yields down to 1.4%, meaning that investors are looking in negative real yields for ten years at a rate of 1.4%...! Of course, all eyes are on Spain and Greece with more to come the coming weeks... But it doesn't feel the same as it did during 2008, people are more "used" to negative news... I guess this is reality where we will see modest growth for years to come, but still growth... In that environment I dont want to own bonds with 1.4% yield, I would prefer equites or corporate credits... However, I have the luxury to invest in FX... And I much rather invest my money there. :)

The last week was a good stress test of my algo, it is somewhat designed to make money when equties continue to slide... And so it did, even to an extent I never though was possible... It feels that I continue to repeat myself, but the performance are way above what I ever dreamt of. See graph below for volatility adjusted perforance...

No update on the discretionary portfolio since it is empty... My view regarding SEK played out, but I am still is not up and running with the "firepower" as I want on my new account... Money on the way but these things take longer time than I thought. However, I am a bit sceptical to enter into short SEK positions at these levels.

Algo:

Short EURUSD
Short GBPJPY
Short USDJPY
Long USDSEK
Short AUDCAD

The current portfolio set up is very sensitive to a sudden change of investor sentiment as it is 100% tilted to "risk-off", so increased volatility can be expected!