Another Market Correction

Another Market Correction

by Bo Billeaud on June 19, 2019 The All-Weather Investor

Well, it happened again.  A downer month for stock market investors, although there’s nothing really new about that.  As you can see below, stocks have declined by at least 5% from a record close 21 times since the market bottom in 2009.

For us in the All-Weather portfolio allocation, these recurring stock market corrections really are no big deal, whether they represent last month’s 6.5% drop or last fall’s 19.8% (peak to trough) decline.  Why? Because – to review once again – BCM’s All-Weather portfolio is economically-balanced with asset classes that are generally negatively correlated.  That is, when one zigs (say, stocks), the other usually zags (say bonds or gold).  Our portfolio is designed to weather the recurring financial storms that visit us with almost clocklike regularity.

Last month, while stocks (S&P 500) declined by 6.5% last month, All-Weather fell by only roughly one third of that, 2.01% – similar to last fall’s 4th qtr. experience when stocks declined by 13.5% and our All-Weather portfolios fell by 4.3% (performance sheets for our composite portfolio allocations and the accompanying disclosures can be found here)

This type of superior relative performance does not occur by accident.  We’ve put an enormous amount of effort and research designing and implementing our risk-managed portfolios that both:

1) perform over time

2) allow us to sleep well at night.

If any of this is new to you, or if you’d like to discuss the details of our approach, philosophy and strategies further, please do give us a call.  We’d love to hear from you.

 


For more information about Billeaud Capital Management and our offerings, please click here

 


About the Author

Joseph “Bo” Billeaud is the founder of Billeaud Capital Management. After earning a BS in Chemical Engineering (University of Louisiana, 1979) and while working in industry for seventeen years, Bo developed the market risk-control models and investment philosophy that undergirds all BCM portfolios. Since effecting a formal career change in 1996, Bo has helped BCM grow into a respected asset management and financial planning firm currently overseeing $400+ million dollars for individual, corporate, trust, retirement and 401(k) accounts…. Read more.