Last week’s sell-off in domestic and international markets will continue today.
Will this hiccup go into the history books as a “correction?” Not sure yet—technically speaking the market needs to decline 20% to be characterized as a correction. I’m willing to say I think this is where we are headed, and were prepared and will continue to be prepared to manage your portfolio accordingly. (NOTE: we shifted more conservative 7/27/15, per the Assset Scale shift).
Some perspective–we are still in a Bull Market—why does this matter? This is NOT 2008. AND, our rule book calls for nothing more than what we have already done: shift more to bonds and reduce international exposure; CHECK.
This from our friends at Dorsey Wright;
“This kind of abrupt action is unnerving to say the least, yet it is important to put this all in perspective. For example, the SPX at the time of this writing is down approximately -3.73% for the year, while peak to trough SPX has pulled back -7.25%. Really the index doesn’t paint the full picture as there have been areas of strength: Healthcare, Biotech, Building – these three sectors prior to Friday were up between +10% and +16%; while at the same time, there have been disasters: Steel, Metals, Oil, and Oil Service – with these sectors experiencing their own bear market with losses of -20% to -30%! But it makes me recall a statement a colleague once told me, “if you can’t take a -5% pullback in the equity market, then you shouldn’t be invested in it.” Or said another way, based on market studies (that we have quoted before), the market on average will have three 5% pullbacks in any given year, and will have on average have one -10% correction. Well, we haven’t had a -10% correction since June 2012. Not to say that is going to happen this time, but we are overdue. And realize that only 26% of the time after such a -10% correction, does it lead to a -20% bear market event.”
So what now? Like sugar and carbs, limit your intake of media noise. You ARE a Liberated Investor—you’re savvy and wise.
- You’ve entrusted an advisor who does not employ emotion at times like these.
- You nor your advisor subscribe to a buy and hold methodlology therefore, you’ve shifted for this event and your portfolio will continue to do so as indicators/rules dictate.
- The fees you pay are LOW—this helps in time of negative returns.
- No conflicts of interest exist in your portfolio of stocks and ETFs; you can trust that you are invested where the opportunity is for YOU, not your advisor’s checkbook.
The above MATTERS. Take stock in where you ve landed and trust what you already know; timing markets is a proposition of hope and luck. We don’t subscribe.
Guidance by indicators that steer us away from stocks in Bear Markets is a data driven approach that isn’t subjective—to THIS, we subscribe. We aren’t in a Bear Market—so quiet the noise and know that we have you managed.
Be a different investor—BE a Liberated Investor; one who shuns the drama of the media and your neighbor. One who sleeps at night because you know a data driven logical plan is in place. These times are not rfun, by any mean, mnor do we have on rose colored lenses
Contact us if you have any questions–or need a dose of LIberatied Investing. Just remember: We’ve got you managed.
As always, thank you for your feedback as we try to keep you updated on the market and your investment portfolios. Lets lock arms, and hunker down, TOGETHER. NOW, more than ever, we want to hear from you!