32.04 +0.11 (+0.34%) Sell

Don't go profit booking on BHF now, it delivered a decent return

13 min read

BHF delivered stellar performance today. On a longer term basis, investors in BRIGHTHOUSE FINANCIAL, INC. made +0.07% per day. Monday's performance of +0.34% was a significant outperformance compared to it's daily average.

[Themes containing BHF]

BHF showed a strong down trend over the last 3 months. During this period BHF lost -27.66% and saw a maximum drawdown of -31.26%. There were 3 short signals during this period that returned a cumulative of +11.73% to investors.


BHF has been underperforming the SP500 index in recent time, after having outperformed till 17 Jul, 2017. Over the last 1 year and 5 months, BHF underperformed the SP500 index on 54% days.

BHF returned losses on 54% days in the last three months. During this time, it delivered on average -0.49% per day. It delivered it's worst daily return of -7.7%, during this period, on Thursday, 6 Dec, 2018. There was initially a bullish trend during this period which started on 30 Oct, 2018 and went on till 6 Nov, 2018. The bullish trend returned +14.43% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -22.14% of investor capital.

BHF had 5 profitable and 7 loss making months over the last year. During the last year, BHF underperformed SP500 index on monthly return basis. BHF was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -20.69% compared to -7.28% returned by SP500 index in Oct 2018. BHF and SP500 index, both had periods of 2 consecutive losing months. It is interesting to note that both BHF and SP500 index significantly outperform during months when quarterly/annual results are announced.

Know what you own, and know why you own it.
-- Peter Lynch

BHF is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in BHF's volatility from 27 Nov, 2018 to 10 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that BHF has positive skewness in it's return distribution. This indicates that investors can expect BHF to make attempts to recover from drawdowns quickly. Which makes BHF a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

Based on your interest in BHF you may find it interesting to know that JOBS and NCI have both performed similar to BHF and can be considered by investors as alternative investment options.

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