34.24 -0.27 (-0.78%) Sell

SLF is a falling knife, continues to bleed every investor trying to catch it

13 min read

SUN LIFE FINANCIAL INC (Foreign) is a falling knife that can bleed you if you catch it on Friday. It lost -0.78% to close at 34.24. On a day when the overall market breadth was 35%, it closed higher than 68% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing SLF]

SLF showed a strong down trend over the last 3 months. During this period SLF lost -11.18% and saw a maximum drawdown of -15.5%. There was a short signal during this period which returned +11.18%.


SLF has been underperforming the SP500 index in recent time, after having outperformed till 1 Dec, 2016. Over the last 2 years 11 months and 3 days, SLF underperformed the SP500 index on 48% days. Which indicates that on days SLF underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months SLF was mostly loss making and delivered on average -0.18% per day. It's best return during this period (of +2.81%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -4.09%) was on Thursday, 6 Dec, 2018. There was initially a bullish trend during this period which started on 10 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +5.03% to investors. This was followed by a bearish trend that started on 10 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -6.42% of investor capital.

SLF had 6 profitable and 6 loss making months over the last year. During the last year, SLF underperformed SP500 index on monthly return basis. SLF was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -8.48% compared to -7.28% returned by SP500 index in Oct 2018. SLF had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both SLF and SP500 index significantly outperform during months when quarterly/annual results are announced.

Here's my gift-giving rule: Respect your current financial situation.
-- Suze Orman

SLF 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 SLF's volatility from 10 Sep, 2018 to 7 Dec, 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 SLF has significant positive skewness in it's return distribution. This indicates that investors can expect SLF to recover from drawdowns quickly. Which makes SLF 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 SLF. Therefore, SP500 must receive a lower allocation than SLF in your portfolio. SP500 index usually has shorter drawdown period than SLF.

On a general note (since you are interested in SLF), three small cap instruments that deserve special mention are HQY, ZBRA and BURL. They have all outperformed the market and must be closely watched for investment opportunities.

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