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Market Continues Its Rally As Earnings Season Starts 04-16-21

Summary:
For now, we remain allocated to the market but are watching our indicators closely for a signal to start reducing exposure. When that time comes, in the next few days or next couple of weeks, we will fall back on our process.  “As discussed previously, ‘risk happens fast.’ It is essential not to react emotionally to a sell-off. Instead, fall back on your investment discipline and strategy. Importantly, keep your portfolio management process as simplistic as possible. Trim Winning Positions back to their original portfolio weightings. (ie. Take profits) Sell Those Positions That Aren’t Working. If they don’t rally with the market during this recent rally,  they will decline more when the market sells off again. Move Trailing Stop Losses Up to new levels. Review Your Portfolio Allocation

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For now, we remain allocated to the market but are watching our indicators closely for a signal to start reducing exposure. When that time comes, in the next few days or next couple of weeks, we will fall back on our process. 

As discussed previously, ‘risk happens fast.’

It is essential not to react emotionally to a sell-off. Instead, fall back on your investment discipline and strategy. Importantly, keep your portfolio management process as simplistic as possible.

  1. Trim Winning Positions back to their original portfolio weightings. (ie. Take profits)
  2. Sell Those Positions That Aren’t Working. If they don’t rally with the market during this recent rally,  they will decline more when the market sells off again.
  3. Move Trailing Stop Losses Up to new levels.
  4. Review Your Portfolio Allocation Relative To Your Risk Tolerance. If you have an aggressive allocation to equities at this point of the market cycle, you may want to try and recall how you felt during 2008. Raise cash levels and increase fixed income accordingly to reduce relative market exposure.

Portfolio management is not an “all or none” endeavor. It is a “game of inches.” Making small changes, adjusting exposures, and repositioning holdings can reduce overall portfolio risk. Such will keep you from spending a lot of time making up previous losses. 

Yes, Babe Ruth was indeed the “Home Run King.” He was also a king of getting struck out. When it comes to your portfolio, swinging for the fences may cost you a lot more than you think.

Just remember, you can win the “game” by just regularly getting base hits. 

Okay, enough sports metaphors for this week. 


The MacroView

Market Continues Its Rally As Earnings Season Starts 04-16-21 

If you need help or have questions, we are always glad to help. Just email me.

See You Next Week

By Lance Roberts, CIO


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Market Continues Its Rally As Earnings Season Starts 04-16-21


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Market Continues Its Rally As Earnings Season Starts 04-16-21

Market Continues Its Rally As Earnings Season Starts 04-16-21 

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Market Continues Its Rally As Earnings Season Starts 04-16-21


Model performance is a two-asset model of stocks and bonds relative to the weighting changes made each week in the newsletter. Such is strictly for informational and educational purposes only, and one should not rely on it for any reason. Past performance is not a guarantee of future results. Use at your own risk and peril.  

Market Continues Its Rally As Earnings Season Starts 04-16-21

Lance Roberts
Lance Roberts has sharpened that lens with 30 years in the investing world from private banking and investment management to private and venture capital. Lance Roberts’ perspective and common sense analysis is sought after by media outlets such as Fox 26 News in Houston, CNBC, CNN and Fox Business News along with numerous publications including the Wall Street Journal, USA Today, Reuters and the Washington Post. Roberts is the Editor of the X-Factor report and publishes the blog Daily X-change.

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