Yesterday (3/16) was a major one-day loss for the U.S. stock market—the Dow was down almost 13%! So, let’s get straight to the point:
| Year to Date (3/16/2020) | Performance |
| Trademark Model | (Net of Fees) |
| Risk Avoider | -2.12% |
| Risk Mitigator | -4.72% |
| Risk Manager | -9.65% |
| Risk Taker | -15.75% |
| Risk Embracer | -26.00% |
| Tactical Risk & Income Strategy TRIS | -1.21% |
| Tactical Risk Strategy TRS | -3.76% |
| Year to Date (3/16/2020) | |
| Market Indexes | Performance |
| S&P 500 U.S. Large Cap | -26.14% |
| S&P 400 U.S. Mid Cap | -35.33% |
| S&P 600 U.S. Small Cap | -38.37% |
| International Developed Markets | -30.05% |
| Market Data: Thompson Reuters |
For our conservative leaning investors, we hope this provides some relief from the daily financial news and the worry it can cause. For our aggressive leaning investors, we believe this could be a good buying opportunity. Stay tuned.
Big Ups and Big Downs
The stock market has had sever major swings, both up and down. With each swing it pulls the emotional lever towards either jubilation / hope or panic / capitulation (unless you’re part of the Trademark team). One thing you may have noted is that after a big loss day it is usually followed by a large up day. This is a common phenomenon (click for happiness) in bear markets that large losses are usually pared with large gains within two weeks. Here is an example from the Financial Crisis:
| Top Ten Large Loss Days of the Financial Crisis (S&P 500) | Corresponding Large Gain Day within 2 Weeks (S&P 500) | |||
| 1 | 10/15/2008 | -9.03% | 10/28/2008 | 10.79% |
| 2 | 12/1/2008 | -8.93% | 12/16/2008 | 5.14% |
| 3 | 9/29/2008 | -8.79% | 10/13/2008 | 11.58% |
| 4 | 10/9/2008 | -7.62% | 10/13/2008 | 11.58% |
| 5 | 11/20/2008 | -6.71% | 11/24/2008 | 6.47% |
| 6 | 11/19/2008 | -6.12% | 11/21/2008 | 6.32% |
| 7 | 10/22/2008 | -6.10% | 10/28/2008 | 10.79% |
| 8 | 10/7/2008 | -5.74% | 10/13/2008 | 11.58% |
| 9 | 1/20/2009 | -5.28% | 1/21/2009 | 4.35% |
| 10 | 11/5/2008 | -5.27% | 11/7/2008 | 2.89% |
All but one of these Top Ten have one thing in common; they are at the beginning of the bear market. Only #9 was close the market bottom.
How do the current large loss and large gain days look so far in the CoronaBear (I made that name up)?
| CoronaBear: Days with a Loss Greater than 4% (S&P500) | Corresponding Large Gain Day within 2 weeks (S&P 500) | ||
| 2/27/2020 | -4.42% | 3/2/2020 | 4.60% |
| 3/9/2020 | -7.60% | 3/10/2020 | 4.99% |
| 3/11/2020 | -4.98% | 3/13/2020 | 9.29% |
| 3/12/2020 | -9.51% | 3/13/2020 | 9.29% |
| 3/16/2020 | -11.98% | ?? | ?? |
Here are my takeaways: 1. We are likely in the beginning of this bear market cycle. 2. Our strategies are performing well (relative to the market) and as expected due to our risk management strategy, so hopefully you will feel free to find another distraction while in social isolation.
We greatly appreciate the referrals that have been sent to us during this challenging time—thank you! We’re happy to help any of your friends who are concerned about their financial wellbeing.
If you have questions, please let us know.
We thank you for being a part of the Trademark Family,
Joe Ezernack
This material is intended for informational purposes only and should not be construed as legal, accounting, tax, investment, or other professional advice. Trademark Capital’s investment strategies are built using quantitative, proprietary algorithms that are designed to identify and react to changing market conditions. However, investors should be aware that no investment strategy or risk management technique can guarantee returns or eliminate risk in any given market environment. As with all investments, Trademark Capital Management’s investment strategies are subject to risk and may lose money. The investment strategies presented are not appropriate for every investor and individual clients should review with their financial advisors the terms and conditions and risk involved with specific products or services. Due to our active risk management, our managed portfolios may underperform during bull markets. Past performance is no guarantee of future results.
