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Today we removed broad based equity market exposure from all risk profiles.  Previously, we were 40%-60% exposed to the S&P 500. 

We will continue to maintain small positions in oil and gas exploration and gold miners. Some models also carry limited energy exposure and our moderate and conservative portfolios have some fixed income positions.

We have been anticipating the possibility of the first 10% correction in many years and it now looks like that may be what’s taking place.  

The S&P 500 is only off 4.5% from its highs and is now down on the year. However, the average stock is down much more as are most asset classes.  Emerging markets are down 14% on the year and down 23% from the highs this year.  Despite the recent 6% rally in gold that asset class is still down 3% on the year.  Small caps are down 2% on the year and off 10% from their highs.  Real estate is down 2 % on the year and off 10% from its highs. Broad based commodities are down 17% year-to-date.  The Barclay’s aggregate bond index is up only 0.5%.  The MSCI All Country World Index, once up 7% this year, is now down 1%.  

The list goes on and the point is there is nowhere to hide. This is being reflected most in all-asset diversified funds, which are showing mid-single digit losses on the year.  We will continue to monitor the various indicators for an opportunity to reenter the markets at what we hope are much lower levels and we will use our large cash holdings to take advantage of the expected volatility.   

This commentary on this website reflects the personal opinions, viewpoints and analyses of the Gainplan LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Gainplan LLC or performance returns of any Gainplan LLC Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Gainplan LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

 

 

Categories: Industry Ideas