Time and again we are talking about “these crazy times.” Now the market is looking very shaky again. So, are the last few days a brief hiccup, the start of a small correction, or a dive into an abyss ala’ March-ish?
Certainly, we have an opinion and can back it up with data, but there are a lot of “professionals” spouting their opinions these days and any of these can be “proof-texted.”
This week I want you to understand when we took our first step conservative and why.
In the chart below is the S&P 500 (US stocks) in blue, the Barclays US bond aggregate (AGG) in red, and a gold star around February 28th.
You can see the movement of the S&P 500, the deep sell-off, the big rebound, and the current downturn. You also see how the Barclays aggregate held up; sold off in March, recovered in April, then a flat but stable May and June. On February 28th, we moved our clients’ accounts risk-off, meaning that we took a step conservative; moving from predominately stocks to predominately bonds. For clarity, neither the S&P 500 nor the Barclays Agg is an exact representation of our investment portfolios, but this picture can help us understand our risk-off move.
Our goal is for you to stay invested over the long term, to minimize large losses, and to invest in the best times of the market cycle. We believe our rules-based investment framework helps us do that.
For more information on our credit spread signal feel free to read this white paper from our friends at WealthShield. CAN YOU TIME ALTERNATIVE INVESTMENTS?
This is the beginning of our framework explanation. This signal falls into the Market Sentiment section of that framework, THE TREND IS YOUR FRIEND gives a good education on that topic. Feel free to read all you want if you want to go deeper. Also, please check out of the FAITH-BASED INVESTING INDEX that we will talk more about in the future, please give me your opinion and ask questions. I would like your feedback.