December Year-End Summary

We ended the year with very little to no trading activity. This was in reaction to both protecting gains made earlier in the year, as well as to avoid the recent instability in global markets. Since our current strategy mainly relies on short term trading, we cannot have the large intraday swings we have been seeing for the better part of the last few months.

We have been using most of our resources on researching longer time frame strategies to adapt to this market. If implemented, this will mean lower leverage, longer hold times, and more range in trades. If and when these adjustments are made, we will surely update our clients on the new strategy criteria. Until these adjustments are applied, there will likely continue to be very little trading activity as we weather the storm so to speak.

All things considered we are very happy with 2008. Admittedly most of the meaningful gains came from the first half of the year, while the second half was really much more up and down. We are content with the drawdown levels because we know how easily we could have sustained a double digit percentage loss in a month given how sharply the market conditions changed in the last few months. 

On a finishing note, we wish everyone a happy new year and a successful 2009.

Please carefully read through the sections below, and make sure you are in line with these expectations. We expect our clients to understand these points completely, so we may in turn provide full accountability.

Risk of Loss
The most important thing we require our clients to understand before making an investment is the risk-reward relationship in trading. With every trade, there is always controlled and calculated risk, in return for good profit potential. Nonetheless, risk of loss is always going to be an inherent part of high return investments. Therefore, for prospective clients who are not prepared to accept draw downs periodically, we are sorry to say that we cannot accommodate your expectations.  We also kindly advise you to stay away from any high return investments that claim no draw downs.

Expectations of Investment
There are no guarantees of profit. Past performance is not indicative of future results. These points must be stated clearly. One month is sufficient to evaluate aspects of money management. You may evaluate draw down levels, consistency of trades made, and that the trading style is in line with our description. However, one month is not a good evaluation period for an investment's profitability, because any given month can produce positive or negative results. The longer your account is being actively traded, the more accurate its evaluation of profitability will be.

Tracking monthly returns
If we trade your account from the first day of the month to the last, you can expect your monthly return figure to match the one we report exactly. Anytime your account has not been actively traded for the entire month, your return for that month will be different from the one we report. This is simply because you were not affected by missed trades, regardless of their profitability. Therefore, we ask clients to track their monthly returns accurately, and account for any trades missed, withdraws and deposits made, and performance fees deducted.

Sincerely,
Rove Capital Team

November Summary

November continued the theme of a market trying to find a bottom. The difference is now we are seeing more of a range bound market emerging. Volatility remains relatively high compared to past market conditions.

While the volatility remains more or less comparable with previous months, unfortunately this month’s technical movements were not very in sync with the implemented system that yielded positively just last month. We have no choice but continue to be patient until this market decides on a longer and sustained trend.

We finished the month of November with a drawdown of -5.69%. With just December remaining this year we look to maintain a relatively low risk exposure to finish off the year. We do not expect economic turmoil to disappear anytime soon, however we do hope for more sustained continuation of coming trends, whatever that trend may be.

Please carefully read through the sections below, and make sure you are in line with these expectations. We expect our clients to understand these points completely, so we may in turn provide full accountability.

Risk of Loss
The most important thing we require our clients to understand before making an investment is the risk-reward relationship in trading. With every trade, there is always controlled and calculated risk, in return for good profit potential. Nonetheless, risk of loss is always going to be an inherent part of high return investments. Therefore, for prospective clients who are not prepared to accept draw downs periodically, we are sorry to say that we cannot accommodate your expectations.  We also kindly advise you to stay away from any high return investments that claim no draw downs.

Expectations of Investment
There are no guarantees of profit. Past performance is not indicative of future results. These points must be stated clearly. One month is sufficient to evaluate aspects of money management. You may evaluate draw down levels, consistency of trades made, and that the trading style is in line with our description. However, one month is not a good evaluation period for an investment's profitability, because any given month can produce positive or negative results. The longer your account is being actively traded, the more accurate its evaluation of profitability will be.

Tracking monthly returns
If we trade your account from the first day of the month to the last, you can expect your monthly return figure to match the one we report exactly. Anytime your account has not been actively traded for the entire month, your return for that month will be different from the one we report. This is simply because you were not affected by missed trades, regardless of their profitability. Therefore, we ask clients to track their monthly returns accurately, and account for any trades missed, withdraws and deposits made, and performance fees deducted.

Sincerely,
Rove Capital Team

October Summary

October made history as arguably one of the worst months in the global economy. As US markets continued its liquidation phase, the rest of the world followed without much resistance. Major Asian stock indices were cut in half within weeks. Many European nations followed suit in bailing out key financial institutions, in an effort to prevent loss of economic structural integrity. This month also saw coordinated rate cuts from central banks across the G7 nations. All of this uncertainty provided the foreign currency market all the fuel it required to continue large swings in price levels.

Fortunately, as far as our trading was concerned, October’s movements did not come as a surprise. The previous 2-3 months provided enough preparation for what was to come.  As stated in our previous summaries, we lowered our effective leverage considerably during the past months of trading. This gave us the margin of error required to adapt to a changing market. As we begin to see a new set of market trends emerge, we plan to increase trading leverage in order to fully capitalize on these new trends.

We finished October with a return of 4.05%. We are pleased to see a solid positive number posted coming out of a few months of defensive trading. To appreciate the results of our strategy thus far, we have updated the Dresden Performance Section to reflect comparative data showing year-to-date returns of Rove Dresden Equity vs. S&P 500 Equity. The S&P 500 Index, in this study, is meant to represent the average performance of large cap US stocks during this period. This negative return of S&P 500 is also quite in line with losses sustained in housing prices, energy prices, and other commodity prices during recent times. This is the case because of a general liquidation frenzy on behalf of investors, who really have no regard for economic fundamentals at this moment. Please note calculations for total figures were compounded and based on net asset values before deductions for performance fees.

On a finishing note, we’d like to thank our clients for being very educated and patient with their investment with us. We are pleased that the majority of clients have enjoyed a very profitable year with us so far, and we look to finish off this year on a positive note for any new clients on board.

Please carefully read through the sections below, and make sure you are in line with these expectations. We expect our clients to understand these points completely, so we may in turn provide full accountability.

Risk of Loss

The most important thing we require our clients to understand before making an investment is the risk-reward relationship in trading. With every trade, there is always controlled and calculated risk, in return for good profit potential. Nonetheless, risk of loss is always going to be an inherent part of high return investments. Therefore, for prospective clients who are not prepared to accept draw downs periodically, we are sorry to say that we cannot accommodate your expectations.  We also kindly advise you to stay away from any high return investments that claim no draw downs.

Expectations of Investment

There are no guarantees of profit. Past performance is not indicative of future results. These points must be stated clearly. One month is sufficient to evaluate aspects of money management. You may evaluate draw down levels, consistency of trades made, and that the trading style is in line with our description. However, one month is not a good evaluation period for an investment's profitability, because any given month can produce positive or negative results. The longer your account is being actively traded, the more accurate its evaluation of profitability will be.

Tracking monthly returns

If we trade your account from the first day of the month to the last, you can expect your monthly return figure to match the one we report exactly. Anytime your account has not been actively traded for the entire month, your return for that month will be different from the one we report. This is simply because you were not affected by missed trades, regardless of their profitability. Therefore, we ask clients to track their monthly returns accurately, and account for any trades missed, withdraws and deposits made, and performance fees deducted.

Sincerely,

Rove Capital Team

September Summary

September saw financial markets go into frenzy over failures of major financial institutions around the world. Most noticeably, investment banks in the United States that were considered to be 'too big to fail' either filed for bankruptcy or required significant bailout liquidity from the Federal Reserve. Intense uncertainty and governing intervention saw the market produce price ranges that were much larger than usual this month. After experiencing this volatility, we were forced to lower our overall leverage and adapt to the range accordingly.

This month especially highlighted how important it is for traders to be able to adapt to changing market conditions. We were quite satisfied with our trading system this month and its capacity to preserve investment capital. Despite finishing flat by end of the month we were content given how hard hit most areas of financial investments were such as stock indices, energy sectors, and even other foreign currency managers.

As this report is being created, we are up 2.5% for the 1st of October. We would like to express our appreciation for clients that have been patient with their investment with us while we weather the recent storm of global financial uncertainty. We continually stress the type of clients we seek are the ones who recognize this is not a get rich quick scheme, but rather a long term build up of capital operating within the confines our risk parameter. We are confident that all our clients can say their investment capital has been quite well guarded with us, relative to most of the investments out there today. We hope to reward everyone's patience during the past 2-3 months by appropriately capturing market movements in October. On a finishing note, we wish to kindly remind everyone that these are very dangerous times to be heavily invested in capital markets. Please be thoughtful and conservative with your financial objectives before jumping into any investment and always stay well diversified. We wish everyone the best.

Please carefully read through the sections below, and make sure you are in line with these expectations. We expect our clients to understand these points completely, so we may in turn provide full accountability.

Risk of Loss
The most important thing we require our clients to understand before making an investment is the risk-reward relationship in trading. With every trade, there is always controlled and calculated risk, in return for good profit potential. Nonetheless, risk of loss is always going to be an inherent part of high return investments. Therefore, for prospective clients who are not prepared to accept draw downs periodically, we are sorry to say that we cannot accommodate your expectations.  We also kindly advise you to stay away from any high return investments that claim no draw downs.

Expectations of Investment
There are no guarantees of profit. Past performance is not indicative of future results. These points must be stated clearly. One month is sufficient to evaluate aspects of money management. You may evaluate draw down levels, consistency of trades made, and that the trading style is in line with our description. However, one month is not a good evaluation period for an investment's profitability, because any given month can produce positive or negative results. The longer your account is being actively traded, the more accurate its evaluation of profitability will be.

Tracking monthly returns
If we trade your account from the first day of the month to the last, you can expect your monthly return figure to match the one we report exactly. Anytime your account has not been actively traded for the entire month, your return for that month will be different from the one we report. This is simply because you were not affected by missed trades, regardless of their profitability. Therefore, we ask clients to track their monthly returns accurately, and account for any trades missed, withdraws and deposits made, and performance fees deducted.

Sincerely,
Rove Capital Team

August Summary

The first half of August turned out to be the staging grounds of one of the sharpest US Dollar reversals in recent memory. Many traders did not expect to see several major support levels wiped out in such a swift fashion. Since our trading philosophy relies on long term consistency, we were inevitably caught defending certain price levels as well. This sequence of events resulted in a drawdown of roughly 5% part way through the month.

When the market creates a movement that is somewhat out of the ordinary, our priority quickly shifts to capital preservation. After a drawdown, to some, the initial urge is to become more active with trading in hopes of quickly recovering the loss. We realize profiting from the market is a long term task and past results should never dictate future trading. The last thing a trader should do after a loss is recklessly chase winners with increased leverage in hopes of the quickest possible recovery. It is a trader's primary objective to subject the capital to as little extraneous risk as possible. This is accomplished by entering each planned trade systematically, exiting without influence of hope, fear, or greed, and planning future trades without any bias of recent outcomes.

For the remaining half of August, we traded with relatively low leverage and remained sidelined as observer for much of the time. We have every intention of staying light until we are satisfied that the market has settled into a new range. Even with light trading we were able to recover close to 3% of the account and finished August with a return of -2.10%. We know there will be winners and losers. It is our goal to provide a strong annual rate of return for our clients.  We do not jeopardize this goal by forcing winners out of a losing month. We are looking forward to favorable market conditions in the months to come.

Please carefully read through the sections below, and make sure you are in line with these expectations. We expect our clients to understand these points completely, so we may in turn provide full accountability.

Risk of Loss
The most important thing we require our clients to understand before making an investment is the risk-reward relationship in trading. With every trade, there is always controlled and calculated risk, in return for good profit potential. Nonetheless, risk of loss is always going to be an inherent part of high return investments. Therefore, for prospective clients who are not prepared to accept draw downs periodically, we are sorry to say that we cannot accommodate your expectations.  We also kindly advise you to stay away from any high return investments that claim no draw downs.

Expectations of Investment
There are no guarantees of profit. Past performance is not indicative of future results. These points must be stated clearly. One month is sufficient to evaluate aspects of money management. You may evaluate draw down levels, consistency of trades made, and that the trading style is in line with our description. However, one month is not a good evaluation period for an investment's profitability, because any given month can produce positive or negative results. The longer your account is being actively traded, the more accurate its evaluation of profitability will be.

Tracking monthly returns
If we trade your account from the first day of the month to the last, you can expect your monthly return figure to match the one we report exactly. Anytime your account has not been actively traded for the entire month, your return for that month will be different from the one we report. This is simply because you were not affected by missed trades, regardless of their profitability. Therefore, we ask clients to track their monthly returns accurately, and account for any trades missed, withdraws and deposits made, and performance fees deducted.

Sincerely,
Rove Capital Team

July Summary

We started out July with smooth trading conditions, and experienced a high of just over 5.25% monthly ROI with minimal drawdown about two weeks into the month. In the remaining weeks of the month, the market proved to be less technical for us and we sustained some systematic drawdowns to a low of -0.5% month ROI. This forms a peak to valley drawdown of 5.75% for July, which happens to be in line with our running monthly drawdown average to date. In times of market indecision and volatility, our highest priority lies in preserving investment capital. All things considered, we were able to achieve this successfully and returned a modest 2.09% profit for the month of July.

We would like to take this chance to remind our clients that it is impossible to predict when our drawdowns or win streaks will occur. This is decided purely by future market conditions presented to us. It is important to note that by randomly adding and subtracting funds throughout a month, one is subjecting another variable into his or her account's performance for the month. Deposits and withdraws to the account should be done systematically, and not in reaction to a string of wins or losses.

Take this month for example:

• A clients doubles his investment amount after seeing 5.25% profits on his initial deposit half way through the month
• His account goes into the proceeding 5.75% drawdown,
• He decides to withdraw back down to his initial balance due to the losing streak,
• The account bounces back to 2.09% profits by the end of the month.

This client's initial balance experienced the exact same performance as we posted of 2.09%. However, the funds he added halfway through the month and withdrew after the drawdown, actually experienced the full drawdown of 5.75%. Therefore overall, he actually experienced a negative monthly return.

Naturally, what this client did had the potential to work in his favor instead. However, the whole message we wish to get across is we do not encourage optomization tactics due to its reliance on chance. It is highly recommended that your funds be added or withdrawn systematically as part of your investment plan rather than in the attempt to capitalize or avoid in our win or lose streaks respectfully.

Please carefully read through the sections below, and make sure you are in line with these expectations. We expect our clients to understand these points completely, so we may in turn provide full accountability.

Risk of Loss
The most important thing we require our clients to understand before making an investment is the risk-reward relationship in trading. With every trade, there is always controlled and calculated risk, in return for good profit potential. Nonetheless, risk of loss is always going to be an inherent part of high return investments. Therefore, for prospective clients who are not prepared to accept draw downs periodically, we are sorry to say that we cannot accommodate your expectations.  We also kindly advise you to stay away from any high return investments that claim no draw downs.

Expectations of Investment
There are no guarantees of profit. Past performance is not indicative of future results. These points must be stated clearly. One month is sufficient to evaluate aspects of money management. You may evaluate draw down levels, consistency of trades made, and that the trading style is in line with our description. However, one month is not a good evaluation period for an investment's profitability, because any given month can produce positive or negative results. The longer your account is being actively traded, the more accurate its evaluation of profitability will be.

Tracking monthly returns
If we trade your account from the first day of the month to the last, you can expect your monthly return figure to match the one we report exactly. Anytime your account has not been actively traded for the entire month, your return for that month will be different from the one we report. This is simply because you were not affected by missed trades, regardless of their profitability. Therefore, we ask clients to track their monthly returns accurately, and account for any trades missed, withdraws and deposits made, and performance fees deducted.

Sincerely,
Rove Capital Team