TrendCalc Market Insights
Monday, the S&P500 was once again down (-0.76%). This was the 5th down day bringing its YTD return to +3.44%. Sectors and asset classes were mostly negative but there were several pockets of remarkably positive returns led by gold (+3.77%), banking (+1.61%), energy (+3.07%) and energy service (+3.71%) sectors.
Almost all of our Tier 4 Wealth Creation had significant increases, especially relative to the S&P500’s negative day. These TrendCalc models continue to grow their performance gap over buy-and-hold portfolios and various benchmark indexes. TC Sectors and TC TINS are our top year-to-date performers with returns of +9.57% and +10.92% respectively. 51 days into 2021 doesn’t prove anything, but we are pleased in our process producing successful returns vs benchmark indexes and Conventional Wisdom’s passive BaH (buy-and-hold) average-averaging.
Our macro concerns:
- Fed (and other central banks) action and manipulation
- Government leadership and decision-making in battling COVID
- Growing likelihood of increasing inflation from macro concerns 1 & 2
Early this morning I was having a discussion with one of the potential future stars of investing and wealth building. He is smarter than he realizes but still has a lot to learn and experience. We were debating the current state of the investment markets and how to possibly best position portfolios. We brainstormed a few ideas, drew a few conclusions and after we finished, he ended our discussion with “fingers crossed!” What he was really saying is there is a lot of chance in the markets, and he recognized that, as smart as either of us think we are and will become, anyone’s ability to achieve great performance and wealth has an element of luck to it. But, that said, being dependent purely on luck for success, you will be like most people, where the upper echelon of your achievement will at best only be average, and more likely, be something below average.
Counting on luck is a part of anyone’s success ability as an investor. As important, maybe more important, is your current and growing knowledge, understanding and experience of how markets truly work and how you position yourself to experience and capture a lot of that great luck. This is accomplished by incorporating a (pre-)defined systematic buy-hold-sell decision-making process and procedures, which largely understands and employs various forms of adaption to the changing winds (maybe that should be spelled “wins”) of the investment markets. It is rigid in its understanding that market psychology and behavior (human emotions) are some of the greatest drivers of markets and always will be, but at the same time, flexible enough to adapt as the unceasingly changing economic environment and investment markets’ circumstances.
If you or your source of financial advice don’t understand the value of luck combined with knowing and understanding what it takes to position your investment and retirement plans and portfolios, then maybe it is time you talk to a true market professional who does.
Philip S. Hammond, CFP®
Managing Director/Chief Portfolio Strategist
This material is not a recommendation to buy, sell, hold, or roll over any asset, adopt an investment strategy, retain a specific investment manager, or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Investors should discuss their specific situation with their financial professional.
Except where otherwise indicated, the views and opinions expressed are those of TrendCalc as of the date noted, are subject to change at any time and may not come to pass.
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