Risk may be asleep, but it has not died and gone away

This time last year I was urging caution in your approach to markets.  I was wrong.  Like most ill-conceived beginning-of-the-year resolutions, caution was abandoned quickly and without remorse.  Bitcoin comes to mind.  There are others.  Early market returns suggest more of the same.  The US market as well as most of the world markets have managed to navigate plenty of potholes, and though many sources of disruption remain in place, optimism and momentum are stuck like a limpet to current market psychology.  I’m not grousing about a market that continues to go up.  The Salt Creek models had a very good year.  Our strategy performed in line with expectations with only minor changes throughout the year. But when a market does over 2% in four days, extrapolating can quickly get removed from reality.  Risk may be sleeping but it has not died and gone away.

A new quarter of rebalancing is quickly approaching.  I am very pleased with the performance we saw last year.  This year may prove more challenging. I anticipate a few minor changes in light of events that have occurred during the 4^th quarter.  Again, I emphasize minor.  Markets are not static, and capital market expectations fluctuate as changes occur to monetary and fiscal policy both in domestic and foreign markets.  We remain committed to the guidelines of our strategic allocations and to the solution set provided by the team at Sortino Investment Analytics.

LaSalle St. Investment Advisors, LLC
940 N. Industrial Dr.
Elmhurst, IL 60126