- Your performance is different than what you see on TV.
- The markets continue to overreact to coronavirus fears.
- We rebalanced accounts in January to lower stock and increase the allocation of bonds and gold.
- Some of our proprietary indicators are showing a very high fear factor in the market.
- We have used this opportunity to start to INCREASE our overall stock allocation in all our balanced accounts.
Does CNBC have you scared to look at your portfolio? You should sign onto the Landsberg Bennett client portal or the fidelity.com webpage and look at your balances instead of listening to all the gloom and doom on TV. Although you will be down from where we were January 1, we think you will be pleasantly surprised by your portfolio’s performance.
In every balanced account (where we own any amount of bonds), we trimmed our stock positions in January to protect some of the gains from a superb 2019. This has given us some more downside protection in this recent sell-off as well as giving us some “dry powder” for when we see some attractive opportunities in the market.
We have been watching market metrics over the last week or so hoping for an opportunity where we would see an abundance of fear creep into the market. This morning, a number of our metrics gave us a clear sign that a great deal of fear and anxiety had entered the market and provided us an opportunity to start slowly buying at these lower levels. Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family, is credited with saying that “the time to buy is when there’s blood in the streets.” It appears to us as this may be starting to happen, figuratively not literally.
We are not suggesting that the market cannot go lower from here, but we believe this is a good entry point to start adding to existing positions. For long term investors, volatility is a good thing that allows entry points into the market for those that have prepared ahead and have liquidity. We did and you do.
Thanks again for the trust and faith you have placed in us. As always, please feel free to forward this to a family member, friend, or neighbor who isn’t receiving timely communication from their advisor.