Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.
If you’re like many people I’ve talked to lately, you may be concerned about what the market has in store when the current bull market comes to an end. Will we see a bear market decline in the 30%–40% range? Or, will it be a debilitating decline in the 50%–60% range like we have experienced twice in the past 20 years? No one knows.
This week, I want to talk about a well-documented pattern of investor behavior that does not serve their best interests: letting emotions rule investment decisions. We originally posted a version of this article last year just before the COVID crash.
The major stock market indexes posted strong gains last week. The NASDAQ 100 (the leader for the week) was up 3.8%, the S&P 500 Index rose 3.2%, the Dow Jones Industrial Average gained 2.6%, and the Russell 2000 (the worst performer for the week) gained 1.7%. The 10-year Treasury bond yield rose about 9 basis points, as Treasury bonds fell slightly for the week. Last week, spot gold continued its move upward, rising 1.3%. Lately, the metal has performed more as an inflation hedge than a safe-haven asset. It is up nearly 30% year to date.
Last fall I wrote a couple of articles about how the financial industry and press may have been premature in reporting on the death of so many industry strategy favorites (you can read them here and here). The 60/40 balanced portfolio, value investing, hedge fund, and momentum strategies were all discussed.