Looking at why Wealth E&P doesn’t move in line with the markets, and why that is exactly what you want
June 21, 2021
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the markets this past week.
I want to talk not only about the performance in the markets last week, but also about why our strategies look nothing like the stock market performance and why that is a good thing.
So first, it was not a great week in the market last week, as all the indices were down. NASDAQ was only down about 0.25%, the S&P down about 2%, and the DOW almost down 3.5%.
We're off to a great start on Monday, and we're going to try to keep that up the rest of the day today and the week.
As I said, I want to talk to you about why we look nothing like the market - we use a strategy called ‘sailing and rowing’. During good times, we just open up the sails and try to get market performance, but during those difficult times, we get out the oars and try to work the markets.
Now, here's the thing - we're not going to be right all the time. If you look in the middle, left side of this, we're right about 70% of the time. By right, meaning we beat the benchmark of the S&P 500 at about 70%. We're getting positive returns about 84% of the time.
During good times, you can see both Wealth E&P and the S&P go up, although the lines are somewhat different. That's what I really want to point out to you - they're not going to look identical because it is a different approach and a different strategy.
Most importantly, when the market goes down, we're getting out of the way and not only avoiding losses, but trying to capture gains during those tough periods. That's why in the end, we end up with better performance and with lower risk. You can see the risk number here in the 40s being much lower than the stock market.
That's why we look much different than the market, as that is the goal and objective. I know there are days when it is not too fun to watch, but overall it pays off.
If you have any questions for us about the financial markets, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our next Market Minute next week!
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