MRM Commentary


Monthly Investment Commentary

May 2020

      Have We Reached the Bottom of the Economic Valley?

      We’re not out of the woods yet, but optimism is far outweighing pessimism on Wall Street. Remember, the market isn’t a perfect mirror of the economy, it’s a relative-to-expectations tool — we don’t need to recoup all lost GDP or job losses, we just need to begin climbing out of this economic valley. And anecdotal evidence indicates we’re doing just that. So much so, the NASDAQ has erased all of 2020’s historic decline and turned positive on the year. Much remains uncertain (a vaccine is likely the silver bullet).

      MRM Group claims compliance with the Global Investment Performance Standards (GIPS®).
      Please contact MRM Group to obtain a Compliant Presentation and/or MRM's list of Composite descriptions.

      MRM Portfolio

      In an upside surprise, China exports rose 3.5 percent in April, smashing analysts’ expectations of an 18 percent decline. The China Association of Automobile Manufacturers also reported a 1 percent increase in auto sales to 1.98 million, following a 43 percent drop in unit sales in Q1. Several automakers independently confirmed the positive turn in China.

      Vaccine Candidates Going Through the Paces
      Pfizer last week launched human trials of a potential coronavirus vaccine in the U.S. that contains genetic instructions that “teach” the body to attack the coronavirus. Another company, Moderna, is prepping a phase 2 vaccine trial (with 600 people) and could reach phase 3 by summer. According to the World Health Organization, there are more than 100 vaccines currently in development as of April 30.

      A 122-month Streak Ends
      Economic activity in the services in the U.S. — which represents the largest share of the economy — contracted for the first time since 2009 in April, ending a 122-month period of positive readings. The Institute for Supply Chain Management’s survey of non-manufacturing companies reached 41.8 in April, down from 52.5 in March (any reading below 50 indicates contraction). Businesses are facing challenges adjusting to new restrictions, while uncertainty about the severity and duration of coronavirus impacts to supply chains, finances and workers continues to weigh on sentiment.

      MRM'S VIEW

      Unemployment surged to 14.7 percent in April, eclipsing the post-WWII record of 10.8 percent reached in 1982. A total of 20.5 million Americans lost their jobs in April, in what was the steepest decline in payrolls since the Great Depression. However, about 18.1 million of those unemployed persons believe their job loss is temporary. When, and how many of those 18.1 million people ultimately return to work will determine our trajectory out of this valley.

      Source: Northwestern

      MRM model holdings as of March 31, 2020



      MRM Group, Inc. ("MRM") is an SEC registered investment advisor and an independent management firm that is not affiliated with any parent organization. Using quantitative selection methods, each MRM strategy searches within a well-defined universe of securities, using consistent investment criteria to identify attractive investments and create diversified portfolios. MRM seeks to provide long-term capital growth by generating above-market returns, protecting principal and managing volatility.


      The portfolios do NOT use inverse or leveraged ETFs. Universe vehicles may change, from time to time, when approved by the principal of MRM Group at its sole discretion.


      The S&P 500 Index with dividends is an unmanaged composite of 500 large-capitalization companies whose data is obtained from the Standard & Poor's website. S&P 500 is a registered trademark of McGraw-Hill, Inc. The MSCI EAFE Gross Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada, with data from the MSCI website using price with reinvestment of dividends. The performance of blended benchmarks is shown for comparison because MRM uses securities which track indices related to these products. An investment cannot be made directly into an index.


      MRM Group claims compliance with the Global Investment Performance Standards (GIPS®). MRM has been independently verified for the periods January 1, 2008 through present. The verification report is available upon request. Verification assesses whether (1) MRM has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) MRM's policies and procedures are designed to calculate the present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

      Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempts to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, or can accurately predict future market, industry, and sector performance.

      Valuations are computed and performance is reported in U.S. dollars. Client performance may differ based upon the structure of a particular investment program. For example, some programs are structured as wrap fee programs in which trading costs and brokerage commissions are included in one all-inclusive wrapped fee. As such, these costs may be higher than if the client were to pay trading costs and brokerage commissions separately. The standard management fee is 2.0%. Deviation from the model's diversified structure may result in different risk, return, and diversification characteristics and would therefore not be representative of the models.

      All information contained herein is for informational purposes only. This is not a solicitation to offer investment advice in any state where it would be unlawful. There is no assurance that this platform will produce profitable returns or that any account will have results similar to those of the platform. Past performance is not a guarantee of future results. You may lose money. Factors impacting client returns include individual client risk tolerance, restrictions client may place on the account, investment objectives, choice of broker/dealer or custodians, as well as other factors. Any particular client's account performance may vary substantially from the program results due to, among other things, commission, timing of order entry, or the manner in which the trades are executed. The investment return and principal value of an investment will fluctuate dramatically, and an investor's equity, when liquidated, may be worth more or less than the original cost. Investors should consider the investment objective, risks, charges, and expenses carefully prior to investing.

      Investors should not rely on charts and graphs alone when making investing decisions. Investments in securities of non-US issuers involve investment risks different from those of U.S. issuers, including currency risks, political, social, and economic risks.

      Net-of-fees returns are presented after advisor, management, custodial and trading expenses. The net of fee returns are calculated using actual management fees. The actual fees charged vary and range from .5% to 2.2%, depending on the size of the account and the custodian.

      All MRM platforms are suitable for long term investing.

      Please read the fact sheets and disclosures for each platform carefully before investing.

MRM's website provides in certain places information obtained from outside sources or other website addresses or links. The outside information, or any other website information or links, including market and price information, and any other information from outside sources, contains information maintained or provided by institutions or organizations that are independent from the MRM and MRM Entities. MRM does not approve, recommend or have any control over these unaffiliated entities. MRM cannot guarantee or assume any responsibility for the accuracy or completeness of any information provided by any outside organization or entity, and such information is not considered content or images contained on MRM's website. MRM recommends that a user independently review or verify any information provided by any outside source available on MRM's website before acting or relying on such information. If users click on any third party link, any transactions undertaken or information users submit will be subject to the privacy policy of the third party's website(s). For more information, see the resulting third party's privacy policy.