Recent Market Volatility
Source: Sierra Investment Management, FastTrack, May 9, 2018 through November 30, 2018
The persistence of volatility that has defined the capital markets for the better part of the last sixty days has resulted in a tactical de-risking of Ocean Park portfolios.
Our investment process, which is predicated on trend following across a wide variety of fixed income and equity asset classes and trailing stops deployed under each portfolio holding, has produced many Sell signals that have been executed upon in recent weeks. Most of the Sells we performed were to holdings in asset classes that are/were heavily correlated to the S&P 500 Index.
The result of the self-imposed de-risking is very few remaining risk-on holdings. The portfolios are currently allocated anywhere between 50-80% in cash, depending on the strategy. With this available dry powder, we will be continuously listening to the markets to identify the asset classes entering any sustained upward trends to participate in.
Our primary focus is keeping our clients and shareholders out of harm’s way. Our investment philosophy, unaltered since our firm’s founding in 1987, continues to drive our investment decision making.
Past performance does not guarantee future results and there is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses.
The iShares 20+ Year Treasury Bond ETF (TLT) seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than twenty years.
The iShares 7-10 Year Treasury Bond ETF (IEF) seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities between seven and ten years.
The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities. There is over USD 7.8 trillion benchmarked to the index, with index assets comprising approximately USD 2.2 trillion of this total. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.