March Badness: The 60/40 playbook has gone up in flames. Making sense of the stock/bond selloff.
Risk management works in because it makes you clear-eyed for what happens after the fall.
I don’t often post here on Saturdays. The week is busy, we send a lot of research out, and we assume that by the weekend, everyone just wants to relax. The Sunday edition is the catch up/digest version, recapping what I published during the past week, for that same reason.
But I’m posting today because I’m going to assume that this weekend is a bit more anxious for many investors than usual. And since my resume includes steering carefully through every bear market since the 1987 crash, at times like this, weekends are a time to really hone on what is happening.
Our regular readers likely realize that while this recent market action, which has the S&P 500 down 6.5% since January 27, was no surprise to me, and that I was positioned for it, that’s not the real takeaway. My whole style of investing is built to ALWAYS be ready for sudden changes of fortune in markets.
That’s what drives the selection and rotation among the positions in the ROAR 10 ETF portfolio, the one I talk about here often. From the ROAR.PiTrade.com site, here is how the last 3 months have shaken out versus ticker AOM, a 40% stock/60% bond portfolio, the strategy’s primary benchmark.
Do I sacrifice upside sometimes? Sure. Do I do so willingly, since keeping what I have is paramount? You betcha!
That means looking at markets for what they are: tools to get what we want out of life. That’s it. Forget the commercials, the flag-waiving to “be a long term investor” and all that. To me it is as simple as this: for every $100 I have now, there is no way I’m going to let this inanimate object…the financial markets…take more than $5 away. That’s the mentality I invest with, always. And that’s why our paid service is not for everyone. But for those in sync with the idea of “playing offense and defense at the same time,” we hope it is an oasis at times like this.