FS INVESTMENT CORP significantly underperformed on Tuesday. It returned -4.3% to close at 5.79. On a day when the overall market breadth was 35%, it closed higher than 70% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.
Buy-and-Hold investors in FSIC experienced a maximum drawdown of -22.28% over the last three months. It returned -22.28% during this strong down trending period. There were no long signals during this period, where the short signal generated good profits of +22.28% for investors.
FSIC returned losses on 70% days in the last three months. During this time, it delivered on average -0.4% per day. It delivered it's worst daily return of -4.3%, during this period, on Tuesday, 11 Dec, 2018. There was initially a bearish trend during this period which started on 16 Oct, 2018 and went on till 29 Oct, 2018. The trend delivered -8.69% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 1 Nov, 2018. This bullish trend delivered +3.18% to investors.
On monthly basis, FSIC delivered losses in more months over the last year, than profits. FSIC delivered profits less regularly than SP500 index. FSIC was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.4% compared to -7.28% returned by SP500 index in Oct 2018. FSIC had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -32.48%. It is interesting to note that both FSIC and SP500 index significantly outperform during months when quarterly/annual results are announced.
Glamour is what I sell, it's my stock in trade.
-- Marlene Dietrich
FSIC is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in FSIC's volatility from 13 Sep, 2018 to 8 Nov, 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 FSIC has significant positive skewness in it's return distribution. This indicates that investors can expect FSIC to recover from drawdowns quickly. Which makes FSIC a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
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