Performance Report: 08/31/2025
All performance data for our strategies is net of all fees and expenses. All performance data for indexes or other securities is from sources we believe to be reliable. All data is as of 08/31/2025.
Investment Strategy
MAP - Full ($500k+)
MAP - Plus
MAP - Balanced
S&P 500 Index2
Mod Alloc(AOM)2
Growth Alloc (AOR)2
July Return
2.5%
3.3%
2.3%
1.9%
1.9%
2.7%
YTD
18.7%
N/A
N/A
9.8%
8.8%
10.9%
Inception1
76.2%
N/A
N/A
119.3%
41.9%
60.0%
Sortino3
1.02
N/A
N/A
0.81
0.50
0.63
(Disclosure: We added performance figures for our new strategies solely on a month-to-month basis as any prior data will be inconsistent and potentially misleading. We will post continuous data for our full-size MAP Strategy since its inception on 5/1/2019. We use AOM and AOR as our benchmarks as they are low-cost index funds that model the exposure of the majority of retail investors. Our risk measures are aligned closely with these funds. It is important to note that individual account performance varies and your account may perform better or worse than its model. The model's performance is simply the average performance of all accounts participating in the model.)
Performance Update
We had another really solid month with all our strategies appreciating and doing so inline with their overall risk parameters. Our Plus strategy is our most aggressive strategy and saw the best performance, our Core MAP was in the middle as it should be and our conservative Balanced approach delivered slightly lower returns but actually better risk-adjusted returns than any of our strategies. Our Core MAP strategy just clocked a Sortino ratio above 1.0 since inception which means we are delivering risk-adjusted returns in excess of practically all retail strategies. We are delivering twice the risk-adjusted returns of our more conservative benchmark, the iShares Core 40/60 Balanced Allocation ETF which has a Sortino ratio of 0.5.
Market Commentary
Over the course of my four decades in this business, I have seen the large stock market indexes exhibit so much resilience that nothing should surprise me anymore. But as I logged the YTD returns for the S&P 500 (SPX), I was taken back. The index is up nearly 10% this year despite a host of global-economic issues that are far from resolved. It is truly astounding what the stock market and the US economy has shaken off as we see indexes at all-time highs yet again.
A few years ago, the FED was quick to print $5T to rescue the capital markets from the Covid crisis. And subsequently, the US stock market recovered from its losses in fairly short order. It took about 7 months to recover its Covid Crash losses and 11 months after the Covid panic lows, the SPX was back at new highs.
Then Russia invaded Ukraine in March of 2022, causing the stock market to experience a quick, knee-jerk reaction lower. Several commodities, most notably wheat, spiked higher. Despite our President's attempts to bring peace to Eastern Europe, the war continues to rage on. Yet the SPX is at all-time highs and wheat prices have fallen 60% from their highs of early 2022 and are even trading well below the prices prior to the invasion.
We then had largest spike in inflation in 40 years, causing interest rates to also spike. While "year-over-year" inflation has settled down, inflation figures are still elevated versus historic norms from the past 30 years. Prior to the inflation spike, the Wall Street Mantra was the "TINA trade", meaning there is no alternative to US equities. But once interest rates climbed higher, a viable alternative to US equities came to the forefront. And since 2022, we have seen other securities such as gold come into favor. The TINA Trade is clearly dead yet US equities are well above their 2022 levels.
Then in early 2023, several decent-size banks collapsed overnight. Silicon Valley Bank (SVB) was first, followed by a couple of others. Again, the FED was quick to triage the carnage in the financial sector through an ingenious new program where they would allow banks to loan against their discounted US Treasuries for 100c on the $. While this stopped the bleeding, it didn't resolve a critical issue: banks the world over are sitting on a truckload of US Treasuries with yields in the 1% range and they are now paying well north of that to retain deposits. Thus, each and every day, banks are losing money by paying more interest than they are earning, and that is before they pay things like salaries, building costs, utility bills, ect. Despite this, the financial sector is also at new all-time highs.
Earlier this year, stocks went into a free-fall losing 20% in just about a month when our President announced a series of crippling tariffs. The "Tarriff Tantrum", as it was called, is still not resolved either. Yes, there has been some back-and-forth and some deals here and there, but largely, the reality of import tariffs are still prominent. Yet, in just a couple of months, the SPX recovered all its losses from March and has marched on to new all-time highs.
So, the war in Eastern Europe is not resolved, inflation is still above trend, the TINA Trade is dead, banks across the nation are still bleeding cash, and tarriffs remain as an incredible nuisance to our economy. Yet, nearly all stock market indexes sit at new all-time highs. The geo-political issues that have hammered the stock market again and again over the past several years are nowhere close to being resolved but the stock market is priced as if all is well. I am reminded of the scene in Animal House where Kevin Bacon is pleading with the crowd, "Remain Calm, All is Well!"
All is well as long as the FED can continue to print an unlimited amount of funds to stuff into the capital markets keeping prices headed higher. And wow has it worked. Since the advent of QE in November of 2010, the US economy has not suffered a recession outside of the Covid panic. That is truly remarkable. 15 years without a major economic setback. Several years ago, a well-regarded economist named Harry Dent claimed that the US economy would be in ruins by now due to the eventual decline associated with Baby Boomers exiting their peak spending years. Lots and lots of really smart people have conveyed various ideas as to why the US economy would be suffering at this point in time. But apparently, no one informed the stock market.
So, are US equities invincible? Is the SPX indestructible? Sure seems like it at this point.
In the short-term, equities do look vulnerable, which I've conveyed in my past few updates. My MAP system is decidedly bearish on large-cap ETFs like SPY and QQQ. But that doesn't mean that stocks won't continue higher, it is just the odds of them doing so are lower than normal. From a technical perspective, SPY is carving out a distribution dome which is the pattern that played out prior to the 2007-08 Financial Crisis. But in 2007, the FED didn't have its QE bazooka at the ready. I wouldn't be too surprised if stock market indexes do take a breather here. Our current exposure is on the high side so it is possible if the stock market indexes do fall we could give back some of our returns. But as always we do have stops in place which should contain the damage.
I would be remiss if I didn't address another key segment of the capital markets. Gold, a critical sector for many investors, has just broken out of a three-month trading range and done so on impressive volume. It is clear money is moving into this sector. Historically, the FED has fought hard to keep gold prices contained but, so far in 2025, they have failed to that end.
It strikes me as terribly odd that the price moves in gold and silver have not caught the attention of the financial media. As I stare at my charts, I see gold and silver spiking higher and then I shift over to my other screens to check out the financial websites and find no mention of the shiny metals. When Bitcoin or NVDA have climbed to new heights, the financial media is all over it. Yet, when one of the largest and most historically significant markets hits new highs, there is no mention of it. CNBC, Fox Business, SeekingAlpha, and Bloomberg are currently not making any mention of gold at all-time highs. And Marketwatch.com just posted an article about how pointless gold is in light of new highs. This leads me to believe that the precious metals still have some work to do before catching the attention of retail investors. And when that takes place, they should see some appreciable gains. Once the likes of Edward Jones start piling into gold, prices will explode higher, giving us a nice market to sell into.
Currently, we are sitting on a rather large allocation to gold, silver, and various mining companies. I don't think this is a reflection of my personal biases, rather it is simply because precious metals is the sector that my MAP system is most bullish on. My MAP system measures money flows and, it appears, that more money is flowing into gold than US equities. And the price action as of late clearly supports the MAP is right, at least for now. Later this week, I'll post an article on the historical performance of gold versus large-cap equity indexes. In completing this study, I was truly astonished to find out that gold futures purchased with a US Treasury overlay have actually outperformed the DOW and the SPX by nearly 3:1 since the end of Bretton Woods.
Conclusion
Despite my calls for an impending decline in US equities the past few months, US equities have continued higher, and so have our strategies. On an absolute basis, my strategies have delivered returns above our benchmarks and even bested the riskier S&P 500 the past few months. We have been incredibly fortunate that my MAP system has identified some "4-baggers" like MP, CCJ, and SIVR. There have been some detractors, but largely we have been on the right side of the ledger all year. As long as I am disciplined in listening to the MAP and allowing it to steer our investment decisions, I'm confident we'll continue to do well. The capital markets have been an unruly beast the past several years and it has been tough to "fight the tape" when required, but I feel fortunate to have the tools that I do to help me tame the beast.
As always, please don't hesitate to call us at 512-553-5151 if we can be of any assistance.
Best,
Matt McCracken
1) Inception date of 4/30/2019
2) All benchmark prices and returns are obtained through IBKR's PortfolioAnalyst reporting tool. S&P 500 Index is calculated using the index price. AOM is the iShares Core 40/60 Moderate Allocation ETF. AOR is the iShares Core 60/40 Balanced Allocation ETF. These benchmarks were chosen as they represent the prevailing investment strategies of retail advisors.
3) The Sortino ratio is a commonly used measure of "alpha" or the value a manager adds to a portfolio. It is similar to the Sharpe ratio. The Sortino ratio does emphasize the negative impact of downside volatility more than the Sharpe ratio which is why we use it as our primary measure of alpha.