The markets have been experiencing significant volatility recently.  We look at recent disturbances as confirmation of our model’s conservative signals.  Our models do not yet suggest that this will turn into an enduring material decline.

It was not a bad quarter! U.S. equity markets were very strong across all styles and sizes. We moved past the impact of February’s dive in this quarter, and although you can point to different reasons to justify calling it strong, clearly the economy was the primary factor, with the U.S. continuing to buck the trend of slowing growth in international markets.

The Oracle of Omaha, Warren Buffett, is a consistent optimist about the power of investing in the U.S. equity market. Though known as a selective investor, he advocates that the average investor buy and hold a slice of the entire equity market. As a fundamental principle, we agree. But for those of us who aren’t in his unique position as one of the richest people on the planet, sometimes we need access to that slice.

Danny Deutsch’s motto and the title of his book, Often Wrong, Never in Doubt, are about the power of confidence and moving forward even when it results in as many misses as hits. It worked for him. It doesn’t work in investing, which relies on empirical evidence, not hope. However, we find the motto does apply to the alternative investing space—given its poor performance coupled with confident messaging. 

At Auour, we analyze many independent factors to assess greed and fear and the inherent risk in the global markets. We believe the tools we have honed give us a more balanced approach to global investing and provides us the opportunity to gradually move allocations – potentially to all cash – as our confidence builds that a material and enduring downturn lies in front of us...