47.08 -0.21 (-0.44%) Buy

AIV investors herd to book profits while the going is good

13 min read

APARTMENT INVESTMENT & MANAGEMENT CO ranked among the worst performers on Friday. It delivered -0.44% to close at 47.08. It is currently trading +23% above it's 52 week low of 38.0 and is down only 0% from it's 52 week high.

[Themes containing AIV]

AIV showed a bullish trend over the last 3 months. During this period AIV surged by +6.54% and saw a maximum drawdown of -6.23%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in AIV till volatility reduces and a clear trend emerges.


AIV has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 26 Sep, 2016 to 26 Feb, 2018. Over the last 2 years 11 months and 3 days, AIV underperformed the SP500 index on 47% days. Which indicates that on days AIV underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

AIV was profitable on 57% days in the last three months. During this time, it delivered on average +0.11% per day. It delivered it's worst daily return of -3.1%, during this period, on Thursday, 11 Oct, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 2 Nov, 2018 and went on till 13 Nov, 2018. This bullish trend returned +6.87% to investors.

The last 12 months saw AIV's investors making profits in 8 months and incurring losses in 4 months. During the last year, AIV and SP500 index had the same number of profitable months. AIV significantly outperformed SP500 index in Nov 2018, when it returned +9.41% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. AIV had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered +14.83%.

Minimizing downside risk while maximizing the upside is a powerful concept.
-- Mohnish Pabrai

AIV 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 AIV's volatility from 13 Sep, 2018 to 26 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

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

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

Based on your interest in AIV you may find it interesting to know that AMRH has shown remarkable performance and deserves to be on every investors' watchlist.

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