14.68 -0.22 (-1.48%) Sell

Don't buy AINV now, it is an investor's nightmare

13 min read

APOLLO INVESTMENT CORP has destroyed investor wealth on Tuesday. It delivered -1.48% to close at 14.68 which is it's 52 week low, down -17% from it's 52 week high.

[Themes containing AINV]

AINV showed a strong bearish trend over the last 3 months. During this period AINV delivered -10.54% and saw a maximum drawdown of -12.77%. There were 2 short signals during this period that returned a cumulative of +4.68% to investors.


AINV has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 28 Apr, 2017 to 1 Oct, 2018. Over the last 2 years 11 months and 7 days, AINV underperformed the SP500 index on 50% days. Which indicates that on days AINV underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

AINV returned losses on 67% days in the last three months. During this time, it delivered on average -0.17% per day. It delivered it's worst daily return of -6.12%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -5.95% of investor capital.

The last 12 months saw AINV's investors making profits in 5 months and incurring losses in 7 months. AINV was less consistent in delivering monthly returs than SP500 index. AINV was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -8.87% compared to -7.28% returned by SP500 index in Oct 2018. AINV had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -14.01%. It is interesting to note that both AINV and SP500 index significantly outperform during months when quarterly/annual results are announced.

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
-- Peter Lynch.

AINV is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in AINV's volatility from 5 Oct, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that AINV has significant positive skewness in it's return distribution. This indicates that investors can expect AINV to recover from drawdowns quickly. Which makes AINV a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than AINV. Therefore, SP500 must receive a lower allocation than AINV in your portfolio. SP500 index usually has shorter drawdown period than AINV.

On a general note (since you are interested in AINV), two mid cap instruments that deserve special mention are SQ and LULU. They have significantly outperformed the overall market.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{detail.name}} {{detail.trend}} 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter