MP Week In Review
Craig I Adams - Dec 13, 2018
After the last few months it is safe to say that most market participants feel like a piece of ground meat this holiday season. Turkey burger as opposed to turkey breast I suppose. Thankfully, our PIVOT model has enabled us to circumvent the bulk of the downside which has occurred since the start of October. While it is never fun to trade down or below an all-time account high, it is extremely important to remember that investing is a process and not a point. Corrections, while uncomfortable, are a normal and healthy part of markets. In our view, it is the significant market resets that need to be avoided. Nailing the top or bottom of a market is next to impossible, albeit maybe with the odd or random bit of luck, but it is certainly not repeatable. Which is why it is our view that a clear and well-defined tactical process will deliver the best results over a full market cycle.
A 16% to 17%+ year in average client account returns is a hard act to follow… especially when the TSX is down 9.0% year to date (at the time of writing). For those keeping score, a positive 9% 2017 TSX return followed by a negative 9% return in 2018 translates into roughly a 0% return on the TSX for the last TWO YEARS. Once again for those of us keeping score…. Our MP Tactical Income and MP Tactical Growth mandates have both gained approximately 12% during that same time period. Since the start of 2017, that has translated into a TSX ZERO PERCENT RETURN (approximately), and MP Wealth Portfolios mandate returns of approximately PLUS TWELVE PERCENT! As challenging as the current market can be, we will gladly take that rate of outperformance.
Our team has never had more conviction in our process, in our tools (PIVOT), and our ability to navigate through market turbulence. At the present time we are prepared for the worst (actually looking forward to it, if it comes), but we remain ready to put money back to work should things resolve and the market does in fact, re-establish the widely projected pundit uptrend in 2019. Recovering from a negative 3.5% year for the average investor is relatively easy, recovering from a negative 35% year is relatively impossible. While we strive to never have negative performance, we are steadfast in our mission and ability to protect against a market that is down 35%.
easy, enjoy the holidays, ignore the daily headlines, tweets and market gyrations. As stressful as these times can be, we are extremely well positioned in the event of further market downside. As always, we reserve the right to change our mind and put money back to work should conditions improve.
On behalf of our team we would like to wish you all a happy, joyous and safe holiday season… and may the time with your loved ones be significantly less “grindy” than the markets.