I received a question yesterday through email and thought I would answer it here since I’m sure others are wondering the same thing …
the question was simple … after going to cash two weeks ago and then the market stabilizing and having a nice up move from there, the person asked … “Did you get back in to the market?”
The quick answer is … “Yes … we went back in last week”, but I felt a longer answer was appropriate here to help you understand our investing philosophy and strategy.
As you know when we take a very defensive approach to the investing in the market. For us, the most important rule is to protect our clients’ original investment. As a result there will be times where we exit the market out of caution and it keeps chugging higher and ultimately we miss some upside. Over time these small fake outs (as I so fondly call them) ultimately are insignificant and our defensive postures works to our favor where we protect assets during volatile times and grow the account when the market is strong.
For our strategy … it is more important to miss a decline and as a result underperform occasionally during strong up markets, than take undue risk and enjoy the upside but also take part in the declines.
REMEMBER … I am investing my own assets right next to our client’s, investing the exact same way … so protecting OUR capital is the utmost priority. We we have declines, I feel the pain right next to you.
Whether our strategy makes sense to a prospective client really boils down to what is important to them. We have found that most investors appreciate our cautious approach since protecting their original investment is the most important factor and outperforming the market in good times is secondary.
Bottom line, I expect to see times like what we just experienced where we slightly underperform for a short period of time, but I have no issue with it since we are achieving our stated goal of reducing risk and protecting our clients assets.
If you have any questions or comments, as always I encourage you to reach out to me. My door is always open.
Resnn Investments, LLC