Salt Lake City Office
2150 East 1300 South,
It’s football season and we’re down in the 4th Quarter. Volatility means lots of fluctuations, it’s the ups and downs. October saw markets gaining and losing yardage. Market volatility so far this calendar year is worse than the last 5 years combined. At TruNorth, we have a playbook for this kind of volatility and turbulence. We continue to be out there blocking and tackling for you. This is when our experience helps you win.
It is important to not fumble the ball. We actively and tactically manage our clients’ portfolios. We were ahead of the game overweighting our clients in value (dividend paying stocks), we were ahead of the game keeping fixed income ultra-short, and again ahead of the game adding US Treasuries into our clients’ portfolios.
We are experienced at blocking and tackling, protecting your portfolio from excessive losses. We are staying levelheaded and keep our clients invest, taking the emotion and fear factor out. We keep the money you need liquid to avoid market losses when taking planned money out of your portfolios. But only playing defense won’t win games. We have offensive plays and a great running game too. The running game is making sure your portfolio can “run” when markets turn around.
For the “extra point”, we harvest losses as appropriate in our portfolios. Investors with mutual funds in a taxable account (not our clients, we don’t keep those players in our lineup) have locked in losses AND capital gains for taxes. Ouch, that is going to leave a mark.
When markets are at their worst, you need an experience player at their best. As we have discussed in previous Market Views, this is not the first time we’ve navigated up and down markets. We haven’t seen inflation like this in recent years. For those of you under 60, you haven’t experienced the nosebleed high interest rates and inflation hitting buying power. Sharon was a bank teller in high school the last time we saw inflation like this.
Markets are cyclical and one factor adding to the current financial landscape, was the longest bull market in history. This meant that you didn’t need to be a professional to do ok in the market.
With the combination of inflation and market volatility, a lot of “rookie” advisors and do-it-yourselfers are fumbling, either by sticking with bad ideas or running for the hills. If you own an S&P 500 index fund, welcome to being down as much as the entire index. Sharon is a veteran player in the game and to borrow from the Farmers Insurance ads: She knows a thing or two, because she’s seen a decade or two (or three).
NOW is the time to act. We are not in a recession now; unemployment is too low. If the feds cannot pull off a soft landing, economic indicators still point to 4th Quarter of 2023 as the timing for when we could enter recession territory.
Put us in coach, we won’t let you down.
The Team at TruNorth
The definition of a recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.