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Most portfolios are buy and hold, set it and forget it, passive investment strategies. We have a plan.
October 26, 2024
Most portfolios are buy and hold, set it and forget it, passive investment strategies. They go up and down with the market, and usually work out OK, as long as the markets are going up.
70% of the time, markets are good and healthy and go up. Smooth sailing. But what about the other 30% of the time? There is risk, volatility and uncertainty.
It is important to have a plan for the next bear market. It’s simply smart, prudent risk management. In my view, that plan should not be to just ride the market down and then ride it up again. As advisers, it is our fiduciary duty to protect and preserve your capital, and earn you a profit. Losing money hurts twice as much as making money.
As Warren Buffett says, “Rule number one is don’t lose money.”
What’s our plan, here at Aretec?
Here is an overview:
We take a more dynamic approach to navigating markets than other advisors. It allows us to better manage risks and be more opportunistic.
We are active and tactical as opposed to taking a passive buy-and-hold approach. We will go to cash. We will move a portfolio from offence to defence, based on changing market conditions.
It’s a green light, yellow light, red light approach to investing.
Markets today are vastly different from those of 10, 20, or 30 years ago. The traditional 60/40 portfolio has repeatedly failed during market downturns, including 2008, 2020 and 2022. Passive asset allocation lacks both risk management, and the ability to seize opportunities.
We actively manage your portfolio daily, focusing on capital preservation, income, and growth. Our strategy includes both an offensive and defensive approach, adjusting based on market conditions to capture growth or protect against downturns.
The tactical portfolio management we practice provides returns that are uncorrelated to traditional market movements, helping your portfolio stay resilient and recover stronger after volatility.
We have a plan for the next bear market.