We email the status of our WealthProtect System* monthly and give probability (Low, Mid, High) of a change in status within the next two months. We also include a commentary on actions taken this month as well as changes in overall asset allocation.
WealthProtect had no changes this month. October reminded us how rapidly markets can move as US stocks dropped through the 15th, and then rebounded thorough the remainder of the month. We should be careful to not let these types of swings throw us off our game plan. We had a few clients wanting to become more conservative as the markets were dipping, and then wanting to become more aggressive when they rebounded. That is decidedly how not to manage wealth. We are very concerned that the market is overextended here, but we don't let short-term declines dictate our allocation. As a reminder, our process has three major components: 1) Select the proper investment objective in order to set the "guardrails" on your equity exposure, 2) Strategically diversify among a variety of asset classes to potentially improve return, but more importantly potentially reduce risk, and 3) Use WealthProtect to attempt to reduce the risk of major losses. This results in a portfolio that will likely not be in sync with the markets, but hopefully provide a better path with fewer sharp losses. Have a great Thanksgiving!
Thanks for your trust.