Sunday, December 1, 2019

Charts of the Day: Preserving Your Wealth

If, being our client, you're remotely concerned about being hedged (muting gains) as the market continues to melt higher, the following might have you feeling comforted, given the risks as we presently see them.

Note: were our index live at the times depicted in the first chart below, its actual rolling over may have occurred earlier than the points referenced, as we haven't back tested every single week over the past 20+ years, just moments of unusual interest and/or volatility.

Per the chart below, from circa our index turning red prior to the past two bear markets, the S&P 500 rallied another 17% and 15% respectively (imagine how you'd have felt suddenly shifting into defensive mode, then watching the market rally further by 15 to 17%!) before developing topping patterns that ultimately morphed into two historic bear markets; plunging 51% and 57%, and literally wiping out 3 years and 11 years worth of gains respectively (i.e., missing out on those final thrusts higher would've been a-ok when it was all said and done!):

Click to enlarge...

FYI, per the next chart, the market is up 10.41% from the date our index officially first turned red this time around.

S&P 500 daily chart, 8/5/19 to present, along with our weekly PWA Index scores:  click to enlarge...

So, clients, whether you're feeling comforted or perturbed about our present posture ("perturbed" given the real possibility that it's different this time, and, thus, for now, maybe missing out on some truly sustainably gains), know that we see our job as being every bit as much (if not more [particularly during times like these]) about preserving your wealth as it is about growing it...

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