March 2020 Monthly Newsletter - State of the MarketSubmitted by Elite Asset Management on February 27th, 2020
Our strategies are still positive for the year even with the market selloff that we saw in February. I attribute our strategies to performing so well this year due going partially defensive on Friday 2/21. I not only increased our cash postilions but I purchased treasury bonds, gold, inverse ETFs, and even a small volatility position. I didn't go fully defensive with the entire portfolio as I expect a modest bounce back in the near future and I don't want to be caught flat footed. I'm reading whispers of a possible emergency rate cut by the Fed, which could trigger this turnaround. I am watching for the bounce and I will position the satellite portion of the portfolio accordingly, if there is no bounce we'll stay in our current positions. In my world price is king and the goal is to stem or prevent losses and capture the upside. This is not an easy goal but it's what I expect for myself, fr the benefit of my clients.
One of the many benefits of my passively active strategy is that we adjust to market conditions based on price action, and this can happen anytime during the month, not just at month or quarter end. It was this strategy that saved our clients from suffering the full effect of the fastest selloff in history. From the conversations I've had with other investors, who aren't clients, this sell off caught many of them off guard as they were chasing stocks higher. This is what I call FOMO or Fear Of Missing Out, and this is why certain tech stocks went up day after day for no reason. The good news for our clients is that we also caught that upswing and were able to hold onto our gains because I saw the market turning and reduced our exposure.
To put our strategies in perspective. The S&P is down 8.27%YTD, while my aggressive strategy is up 098%. My clients aren't as worried about the sell off because they have experienced my strategies working in their portfolios. I even have a strategy that isn't available for everyone that is up 13.70% YTD. My strategies are designed to handle volatility and sell offs and I feel sorry for clients who decided to leave in the last few months because I trailed the S&P, only to buy in at the height of the market and then watch it sell off.
On a personal note for those who have wondered where I've been this past year. I had to step away due to personal reasons, and for anyone who's gone through a divorce and a lengthy custody battle, you understand. Going forward I will be providing my normal monthly content and commentary which will differ from what you see in the mainstream media. I've also recently decided to waive any advsory fee's on the first $100k of AUM. I do this because I am confident in my strategies and to help investors.
Until next month.
John A. Eiduk, CPA, CFP™
What is S.M.A.R.T Asset Allocation?
We created a rule-based investment process that is S.M.A.R.T. As the investments are Strategic, helps our clients Maximize Gains, Adapts to current market conditions, manages Risk, and is Tactical.
It's still asset allocation only S.M.A.R.T-er.