In case you have not seen the recent events, Israel launched preemptive attacks against Iran last evening. Israel struck targets throughout Iran, including nuclear facilities, air defense systems, and other military targets. Israel also eliminated a significant list of Iranian military leaders.
Risk Reduction Across All Risk/Return Levels
We have substantially reduced the risk in our investment models –- across the board – from our most conservative to our most aggressive. Over time, we focus on growing your capital. However, at this particular time we are prioritizing preserving your investments. As I write this, it’s Friday afternoon and we’re heading into a weekend where the stock market will be closed. We expect there will be plenty of headlines from the Middle East in the days ahead. To be clear, we have proactively reduced your investment risk and there is no action required on your behalf.
We are grateful for your confidence in us, and we take our responsibility to oversee your investment dollars very seriously. This is a short-term adjustment, while we wait to see the direction of events. We have prepared your portfolio for short-term turmoil, but certainly hoping for peace.
Global Backdrop of Slower Growth and Uncertainty
Aside from this acute global conflict, there are several economic points that are not lost on us as we make important decisions like this. Here are a few at the top of our list:
- Our exit is close to all-time market highs. We have a short-term risk presenting itself without a balancing catalyst to drive this higher.
- RSI currently at 62.36. This indicates the market is closer to an overbought state rather than oversold.
- Trade uncertainty remains high. There have been limited deal announcements, but the overall uncertainty continues to drag on economic expectations.
We hope that this proactive move proves to be unnecessary and the situation overseas will improve. In the meantime, rest assured that we are on top of this and we’ll be ready to adjust further or to capitalize on opportunities that this preemptive action may create for you.
S&P 500: 10-Year Perspective
