The Strategic Market Cycle Fund is a mutual fund designed with a dual mandate: to achieve long-term capital appreciation while placing a strong emphasis on protecting capital during unfavorable market conditions. Managed by John P. Hussman, Ph.D., since its inception in 2000, the fund primarily invests in common stocks selected for their favorable valuations and market characteristics. What sets this fund apart is its use of active risk management strategies, including the use of options, index futures, and short sales of ETFs to hedge or adjust equity market exposure depending on prevailing market conditions. This flexible approach enables the fund to dynamically reduce risk during volatile or declining markets and potentially increase exposure when conditions are deemed favorable. The fund generally favors companies with market capitalizations exceeding $500 million and can hold a combination of equities, cash reserves, and derivative contracts. Its role in the financial market is to offer investors a vehicle that blends growth-oriented stock selection with robust risk controls, aiming to navigate full market cycles rather than simply tracking a benchmark index.
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