This week is re-balance week for Salt Creek Investors. On Thursday, we will realign our portfolios with the model weightings. Everything will be business as usual, although the markets have been anything but.
From the S&P’s September 21st close of 2929 to the close on Friday of 2658, the resulting 9% plus loss has rattled some investors, plenty of advisors, and all the media talking heads. The reasons are numerous and varied. From valuations to interest rates to trade issues to mid-term elections, take your pick and make your case— but it’s really not important. What is important is that you maintain the discipline of your investment strategy and the consistency in your processes so that your clients are assured of a rigorous and unbiased approach in how you handle their assets.
Market corrections are inevitable but unpredictable as to when they might happen. Anyone who says different has stayed too long in the sun. Here at SCI, we’re not in the prediction business. We trust the data. If you agree that market returns are normally distributed, then from a statistical viewpoint based on a 20% annual volatility in the S&P 500, on any given day there is a one-in-three chance of the index moving greater than 33 handles. There is also a one-in-twenty chance of it moving greater than 65 points. And even greater moves are likely if the tails in the distribution are fat, something I suspect is more likely than not. If you’ve been surprised by recent market volatility, then I conclude you are overconfident in your assessment of the markets, or you have failed to understand all the risks embedded in the capital markets.
Do not be surprised and be diligent in your efforts to ensure that your clients are not as well.
SCI HIGHLIGHTS
NOVEMBER 1st
SCI QUARTERLY RE-BALANCE
It’s that time again…
Please consider risk profiles and model mapping along with any cash management needs for your SCI clients as we move toward the SCI Quarterly re-balance.
SCI Monthly Webinar
OUR NEXT SESSION:
TUESDAY, NOVEMBER 6th
@ 12:00 PM CDT
In our next session Jim Baldwin and Bob Dunne will discuss and analyze the upcoming SCI Quarterly re-balance.
Click here to join the SCI Monthly Webinar
Join from PC, Mac, Linux, iOS or Android:
Meeting ID: 325 159 0655
Dial In Audio: 669-900-6833
LaSalle St. Investment Advisors, LLC
940 N. Industrial Dr.
Elmhurst, IL 60126
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