Don't invest in ENERGYMLPS THEME now, it is a risky investment

Energetic Mlps significantly underperformed on Tuesday. It fell by -1.95% to close at 882.862. On a day when the overall market breadth was 34%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Theme constituents]

~ENERGYMLPS showed a strong bearish trend over the last 3 months. During this period ~ENERGYMLPS fell by -11.46% and saw a maximum drawdown of -12.08%. There were 2 short signals during this period that returned a cumulative of +5.42% to investors.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~ENERGYMLPS has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 26 Jan, 2017 to 27 Sep, 2018. Over the last 2 years 11 months and 14 days, ~ENERGYMLPS underperformed the SP500 index on 51% days.

During the last three months ~ENERGYMLPS was mostly loss making and delivered on average -0.19% per day. It's best return during this period (of +2.54%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -2.93%) was on Monday, 17 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 22 Oct, 2018 and ended on 30 Oct, 2018. This bearish trend lost -6.85% of investor capital.

During the last year ~ENERGYMLPS had 5 profitable months and 7 loss making months. ~ENERGYMLPS returned profits in fewer months than SP500 index. ~ENERGYMLPS was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -11.03% compared to -7.75% returned by SP500 index in Dec 2018. ~ENERGYMLPS 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 ~ENERGYMLPS and SP500 index significantly outperform during months when quarterly/annual results are announced.

I'd like to live as a poor man with lots of money.
-- Pablo Picasso

~ENERGYMLPS 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 ~ENERGYMLPS's volatility from 20 Sep, 2018 to 4 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 ~ENERGYMLPS 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.

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

Based on your interest in ~ENERGYMLPS you may find it interesting to know that EW and RHT are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.