Vigilare Wealth Management Q3 Recap
By Jason@vigilarewealth.com on October 25, 2011 in Investor Lounge
What a miserable quarter for the markets! The equity markets were negative across the board. Here is a recap of some notable market returns for the quarter:
- S&P 500 – Down 15.5%
- Russell 2000 – Down 23.5%
- International Developed – Down 21.4
- Emerging Markets – Down 27.1
- Brazil – Down 30%
- Gold – Up 9% <–
- High Yield – Down 9.19%
- Cash – Up .01% <–
- U.S. Bond Market – Up 3.5% <–
- Aussie Dollar – Down 10% (versus Greenback)
Only the U.S. Dollar, Gold, and a handful of Government bond markets finished in the green.
Our emphasis on a dynamic asset allocation versus a static buy-and-hold allocation might appear unorthodox and a stark contrast to conventional Wall Street wisdom, but the volatility this quarter alone demonstrates how powerful and necessary a nimble approach is to protect and grow wealth.
Within our investment strategies we have the potential to invest in over a dozen distinct asset classes, yet we have concentrated our exposure in the U.S. Dollar Cash and U.S. Large Cap. In fact, we eliminated virtually all our exposure to some of the more ravaged asset classes such as Emerging Markets and U.S. Small Cap. Taking an even deeper look inside, we also avoided exposure in the Financial & Banking sector (down 24.4%) and focused instead on the Consumer Defensive, Utility, and Technology sectors.
Why did we do this? Our investment analysis is eclectic. First, we evaluate the global macro-environment and develop our “World View”. This World View is not a singular view, and can involve multiple scenario outcomes. This helps us shape assumptions that we apply to our asset class analysis. Within this asset class analysis we use different factors to scrutinize the asset classes. We look at Price, Interest Rates, Liquidity, and Risk (PILR). We believe these factors to be universal in investment analysis. Given this construct, our research and analysis directed us to be extremely conservative. Will we always be this conservative? We hope not, but regardless we will act on our unbiased and disciplined research and analysis. On the bright side, some potentially attractive opportunities are sprouting in the International markets and we may pursue these investments in the coming quarters, among others.
Thank you for entrusting us with your Investments.
The Vigilare Management Team