RIO delivered stellar performance today. On a longer term basis, investors in RIO TINTO LTD (Foreign) made 0.0% per day. Tuesday's performance of +2.16% was a significant outperformance compared to it's daily average.
RIO showed a down trend over the last 3 months. During this period RIO lost -1.99% and saw a maximum drawdown of -13.22%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in RIO till volatility reduces and a clear trend emerges.
RIO was profitable on 51% days in the last three months. During this time, it delivered on average -0.02% per day. It delivered it's worst daily return of -4.43%, during this period, on Friday, 23 Nov, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +8.91% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -6.31% of investor capital.
RIO had 5 profitable and 7 loss making months over the last year. During the last year, RIO underperformed SP500 index on monthly return basis. RIO was also a more risky investment than SP500 index as it's worst month in the last year, Aug 2018, returned -13.46% compared to -7.28% returned by SP500 index in Oct 2018. RIO had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -9.42%. It is interesting to note that both RIO and SP500 index significantly outperform during months when quarterly/annual results are announced.
If you totally want to reduce risk, take no risk. Bury the money. Then you've got no risk at all.
-- Don Connelly
RIO 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 RIO's volatility from 2 Oct, 2018 to 29 Oct, 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 RIO has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
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