ACTIVE INVESTMENT MANAGEMENT
The turn of the century brought with it a 50%+ bear right out of the gate. Many stock portfolios became worth 50 cents on the dollar.
Less than 10 years later, the markets witnessed a second 50%+ bear. Once again, scores of stock investors lost HALF their money.
More recently, investors have seen two of the worst quarters since the Great Depression. Stocks declined 20% in less than three months in 2018. And in the first quarter of 2020, a 34% bearish crash occurred over six weeks.
Why have bear market selloffs in the 21st century been so severe? Why have crashes been so quick and ferocious?
Primarily, markets no longer trade as freely as they once did. Whether you are talking about interest rate manipulation, economic stimulus or “too big to fail” corporate backstops, central banks and governments have their tentacles in every aspect of market activity.
It follows that central banks and governments celebrate their interventions when risk assets like stocks are rising in price. However, their actions can create asset bubbles. And, eventually, asset bubbles pop.
Will your portfolio be okay if stocks get slashed by 50%? The way that they did in 2000? The way that they did in 2008?
For those who do not want to sit idly by and hope that central banks can rescue stocks again and again, we offer an alternative. In particular, we offer a process that aims to lower the risk of market participation. We designed our process to target growth and income goals while simultaneously aiming to limit the bulk of the downside.