Welcome to our active management update on the market


We are seeing a rather perfect strategic diversification response in the markets to the unsettling trade tariff news. The following two graphs are not perfectly aligned, but they are close enough to illustrate the relationship between spikes in volatility and prior corrections over the past three years. For each of the spikes in volatility in the shaded zone, I have labeled the approximate percentage of the correction decline.

 

While stocks have been declining since April 30, bonds and gold have been rising. Today included. This is why we talk about strategic diversification and deliberately build it into every portfolio we construct. By the way, this perfect strategic diversification response also occurred during the fourth-quarter correction last year.

The next few days should prove not only interesting but should also continue to demonstrate the strengths of the portfolios we build.


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