What we are experiencing right now - not just in the markets, but even closer to home - in our businesses, our families and our personal lives, is truly a black swan event. Anyone who is feeling anxiety and fear about the future is not alone. When all else fails, it is important to remember that we are all in this together.
At Cabana, we are more committed now than ever before to providing our clients and advisor partners with the knowledge, updates and reassurance that they need to stay diligent and stay invested.
Our investment process and the foundation of our business was built with the primary goal of minimizing losses in volatile markets – even the most extraordinary of volatile markets.
We have always believed that if we can minimize losses and manage expectations when things get ugly, clients will stay invested and therefore, have the ability to capture returns when the market improves. We believe that in times like these, it is critical that investors have a process that they understand and trust.
To help our clients, our advisor partners… and really anyone who needs it right now, we have compiled a collection of resources, blog posts and perspectives on the current market and our process.
The S&P 500 closed on Friday just below its 200-day moving average. This was the culmination of a 5% drop for the week. The Dow and Nasdaq suffered an equally bad week. This is the second serious technical challenge that the S&P 500 has faced in the month of June. The selling was prompted by… Read the full article.
U.S. equity markets continue to be range bound but hold above the all-important 200-day moving average at 3000 (S&P 500). I read over the weekend that there remains a record amount of money in cash via money market accounts. The belief among the “experts” is that this is evidence that the rally off the March 23… Read the full article.
Two weeks ago, we commented on the ongoing test faced by the broad indices at their respective 200-day moving average. We noted that if equity markets were able to regain and hold above that important technical level, we were likely to see prices move significantly higher as institutional money was forced off of the sidelines… Read the full article.
We have spent the past few weeks discussing the need to have a rules-based process in place that helps take the emotion out of investing when markets appear to disconnect from what we perceive as reality. This “perception” issue has long been studied within the field of behavioral finance and psychology. Humans are by nature… Read the full article.
Equity markets closed out the month of May with big gains. The S&P 500 climbed more than 5% for the month despite a lot of volatility. Swings of more than 1% a day were the norm as investors continue to try and sort through the carnage that has been the past three months. These gains… Read the full article.
Equity markets worldwide continue to climb in the face of dire economics. In two decades of investing I have never seen a starker example of investors immediately setting the bar for a worst-case scenario and then just as quickly repricing as if anything but the catastrophic appear inevitable. The last three months (and perhaps the… Read the full article.
The past week saw continued volatility as equities sold off Monday, Tuesday and Wednesday just below the 200-day moving average and right at the late April highs. Major indices opened down more than 1% on Thursday and Friday, only to make their way to positive territory by the close. This is a big positive on… Read the full article.
Major stock indices gained more than 3% last week, continuing a remarkable bounce off the March 23 bottom. The S&P 500 is testing both its 200-day moving average and the late April high just under 3000. The speed and size of the price gains over the past six weeks has not been seen since the… Read the full article.
Equity markets finished off April with the biggest monthly gain since 1974. The huge rally followed an even bigger decline in March. Face-ripping rallies are common in bear markets, although it must be noted that this one was especially quick. The S&P 500 moved all the way back to its 200-day moving average, just below… Read the full article.
As our country begins to consider reopening for business, I am left wondering how we will forever be changed? Will we shake hands with new acquaintances? Will we travel for meetings or will we stay put and Zoom? Will home delivery of food, groceries and other goods become the norm? Will college education be an… Read the full article.
We’re mixing things up this week. The below commentary is a compilation of the questions and answers that came out of a monthly webinar our team hosted last week with professional advisors around the country. The advisors that participated are currently using our portfolios for their own clients, and in my opinion, had some very… Read the full article.
Investors in markets of all types continue to try and assess the damage to corporate earnings that will be seen over the next few months as a result of the coronavirus. This analysis leads to repricing of all assets, not merely stocks. It is very important to understand that investments across all major asset classes… Read the full article.
Equity markets continue to experience wild swings in both directions. Last week, we saw two big up days, mixed in with three down days. The S&P 500 finished down 2.5% for the week and down almost 25% year-to-date. Yesterday (April 6), those same markets jumped 7% in the face of dire economic predictions, resulting from the… Read the full article.
Stock markets around the world are trying to stabilize after the historic drop we have seen this month. Swings of 4% a day have been the rule for more than three weeks now. The S&P 500 enters the last day of March down 19% for the year and down 12.5% for the month. This makes… Read the full article.
On behalf of everyone here at Cabana, I want to wish our clients, investor partners and friends good health and peace at this time. What we are collectively facing as a nation is in many ways unprecedented. Never has our economy and day-to-day life come to a sudden and complete halt. In the coming months, we will see many… Read the full article.
U.S. and international equity markets dropped 11% just today and are down almost 20% this month alone. Year to date, the S&P 500 is down more than 25%. COVID-19 started in January as something that had the remote possibility of causing problems here in the United States. Today, less than three months later it has… Read the full article.
Given the continued bloodbath we are seeing in stocks, this commentary serves as follow up to the Special Report we released just over a week ago, on February 29. In that report, we noted that an explosive rally was likely early the week of March 2, due to short covering and extreme oversold conditions. We… Read the full article.
Today we are seeing the start of an expected bounce in stocks from extreme oversold conditions. We mentioned this in greater detail in the Special Report we put out over the weekend. We will watch closely over the next few days to find out if the market can hammer out a meaningful bottom. I do… Read the full article.
As soon as we mentioned the first sign that the coronavirus was impacting earnings (Apple lowered forward guidance), the virus broke out of general containment in China and began rapidly spreading into South Korea, Iran and Italy. This news provided a significant psychological impetus over the weekend to sell risk assets in the belief that we… Read the full article.
Earnings have continued to drive equity prices higher throughout the first half of February. This has occurred in the face of a variety of external threats, including ongoing domestic political upheaval and a worldwide coronavirus epidemic. As always, it is earnings that drive prices. The rest is just noise until the noise begins to impact… Read the full article.
In response to a truly extraordinary and painful week in the world equity markets, I believe it is appropriate to update all those who have entrusted us with their hard earned money on where we stand following the drop from all-time highs in the broad U.S. markets that began on February 19. I also think it is… Read the full article.
A Letter to our Clients, Colleagues and Advisor Partners After weeks of uncertainty and panic, it is now clear that what is taking place across the globe is heavily impacting our nation, our businesses, our communities, our families and our day to day lives. How long it lasts and how it all plays out is unknown. The one thing… Read the full article.
Adjusting Risk Within the Economic Cycle Discover A Better Way To Manage Investor Expectations In this paper, we propose a framework for managing investment risk and setting performance expectations on the frontend of the investment process. This methodology, which is built around what we call the Cyclical Asset Reallocation Algorithm (CARA), is designed to identify… Read the full article.
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