Reducing Market Exposure

Today, we made the decision to remove broad-based equity market exposure across all risk profiles. Prior to this shift, our portfolios held a 40%–60% allocation to the S&P 500. While we’ve exited large equity positions, we are maintaining small, targeted allocations in oil and gas exploration and gold miners. Additionally, some models retain limited energy exposure, and our moderate and conservative portfolios continue to hold positions in fixed income.

This adjustment aligns with our tactical management strategy as we anticipate increased volatility and potential further downside in equity markets.

Signs of a Broad-Based Correction

While the S&P 500 is only down 4.5% from recent highs and has dipped into negative territory for the year, the average stock and many asset classes have experienced much steeper declines. Here’s a quick snapshot:

• Emerging Markets: Down 14% YTD, off 23% from 2023 highs

• Gold: Up 6% recently but still down 3% YTD

• Small Caps: Down 2% YTD, off 10% from highs

• Real Estate: Down 2% YTD, also off 10% from highs

• Broad Commodities: Down 17% YTD

• Barclay’s Aggregate Bond Index: Up just 0.5% YTD

• MSCI All Country World Index: Once up 7%, now down 1%

Despite minor recoveries in some areas, these numbers reflect widespread weakness across global markets and asset classes.

Staying Defensive and Ready

The underlying message in the current market environment is clear: there’s nowhere to hide. Diversified, all-asset funds are posting mid-single-digit losses, a reflection of the challenges facing even well-balanced portfolios.

We remain focused on monitoring key indicators for signs of a more attractive reentry point. With a strong cash position, we are well-prepared to take advantage of the volatility ahead and deploy capital strategically when conditions warrant.

This website commentary reflects the personal opinions and analyses of Gainplan LLC employees. It does not describe Gainplan LLC’s advisory services or client investment performance. Views in the commentary may change anytime without notice. Nothing here constitutes investment advice, performance data, or recommendations for specific securities, transactions, or strategies. Mentioning a security or its performance is not a buy or sell recommendation. Gainplan LLC uses various investment strategies, not all discussed here. Investing in securities carries risks, including loss. Past performance does not guarantee future results.

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