In this video I cover briefly how the last week of September ended, and what it means looking longer term at the markets overall direction. I also cover gold's recent drop of nearly 20% the past two weeks (and how we warned of it over a month ago).
Over the weekend I'll be writing our full third quarter commentary that is mailed to clients and should have it posted on the blog next week. It's been the worst three months since the heart of the financial crisis of 2008 so being prepared is of utmost importance. While I've been mentioning this in bits and pieces over the last few weeks, here's the steps we've already taken for our clients:
- In non retirement accounts (taxable accounts) we moved close to 75% in cash at the end of August
- In retirement accounts we moved 1/2 of all equity allocations to cash before the last week of September after being roughly 1/4 in cash since March. What this means, for example, is that if a client was in a 60% growth/40% income allocation they are now 30% growth / 40% income / 30% cash allocation.
- We sold all gold in managed accounts when gold was still above $1,750 per ounce (it is now $1,622 per ounce)
Regardless of what happens the next couple weeks we will maintain these very defensive allocations for at least the entire month of October and possibly longer.
When markets get highly volatile like they've been of late it's important to remember that there will be some really good days and we may look foolish. But there will also be some very bad days, and likely more of them than the good days based on our analysis. At some point, perhaps soon but perhaps months or longer down the road there will be some great opportunities to get back into growth investments. We must remain patient through the volatility for statistically stronger economic and investing conditions.
In the end, being conservative does not mean investors will have no fluctuations in their portfolios. It does mute losses though and allows us the ability to maintain portfolios and be ready to participate in the next real bull market.
If you have questions or comments feel welcome to let me know. If you get this commentary via email you can simply reply. Or, you can leave a comment on the blog at JasonWenk.com.
I'll be out of the office next week celebrating my anniversary with my wife but will be keeping tabs on the markets and will have the ability to post updates via my blog should events arise that warrant them. If October starts out rather mundane though expect to hear back from me the week of October 10.
Thanks for taking a closer look at this update and video - have a great weekend.