If financial markets and their current and future volatility (and this my friends, is unfortunately just the beginning) are concerning you, whether you are clients or not, I am on stand-by for a call. Toll Free: 1-866-697-6928.
The stock market cheerleaders, so vocal through 2021 have all gone quiet. Likely they won’t be taking calls after trying to convince every and anyone that stocks would go up and up and up forever.
The most notorious cheerleader was ARK Invest who’s managed ETF (ARKK) is down some 62% from its peak in February 2021 (as of the time of writing this morning). Over this same time, Bitcoin is down 21%, the All-country World Index ETF (ACWI) is down almost 4%, the NASDAQ is down about 3%, the I-shares balanced fund ETF (XBAL) is flat, the S&P 500 is up about 5%, the TSX is up about 12%.
High Rock clients can call / contact me to discuss their specific portfolio performance, but I would comfortably say that only our younger, more risk tolerant clients with long time horizons are hovering at or near the break-even mark. The balance, with some exposure to our tactical model and our fixed income model will still be in growth (positive) performance territory through this period.
I had so many conversations where I advised against chasing stock market returns over the past couple of years that I can’t count them. So many eschewed our risk-managed approach (not our current clients, mind you) to the belief that 12-15% annual returns were there for the easy taking. Caution and reason thrown to the wind.
Why? because everybody (investors and advisors and their financial institutions) makes money in an up market and if you can be convinced that stocks will go up and up and up, it becomes self-fulfilling. Those of us who have experienced the realities of market melt-downs in the 1980’s, 1990’s, 2000-2003 and 2008, understand that this just doesn’t happen. The days of central bank supported stock markets are now facing the harsh economic realities of inflation and quite possibly stagflation (low growth / high inflation). As I have suggested in my past blogs, higher interest rates are coming and that will have an impact on the severely over-leveraged households who paid up for real estate. If they need cash, they will have to sell over-priced assets.
Advisors don’t earn their fees in an up-market, they just piggy-back off of the ride.
Those who protect their clients in the harsh realities of market volatility earn their fees.
And their clients sleep better for it.
And, of course, past performance is not a guarantee of future returns, but at High Rock we work darn hard to provide our clients with the best possible risk-adjusted returns.