The phone rings, it’s your important client, they see the market falling, no stop in sight, and they ask you “what are you doing to protect my portfolio”? Most advisors do not have an answer, especially when the portion of the client’s portfolio they thought would protect it, the fixed income side, is also dropping in value considerably. But advisors that use the Hanlon Tactical Models easily responded to this question; a portion of your assets have been moved to cash and resting safely.
Even with the periodic “head fakes” that the market makes, most of the gains enjoyed by your clients are quickly disappearing. Most analysts are not bullish on a short-term recovery. It’s looking more and more like previous bear markets, some of which resulted in 30-40-50% pullbacks! Even though it was caused by different conditions, many key indicators show continued market weakness. The present inflation rate and recent interest rate hikes are not friendly to a quick turnaround, and more rate hikes are likely to follow in July, September and perhaps further.
It has been a glorious ride for “Buy and Hold” strategies. But there is a better alternative approach for the present market conditions for a portion of your client’s portfolio. It’s time for a tactical solution.
We at Hanlon have offered tactical strategies since our inception in 2000. When the market endured a recession in 2008, our clients’ portfolios experienced only a small fraction of the pullback. Why? Because we were defensively invested. Then, when the rebound started, we carefully re-entered the market with those asset classes that we believed showed the greatest potential. The proof is in our results. The View Publication button below is a copy of our GIPS® Tactical Allocation Composites. Look what we did during periods of market uncertainty.
