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Q1 2020 Quarterly Outlook



What is there to do with so much uncertainty in the world? We believe that every investor should build a portfolio they believe gives them the highest probability of success, and they should adopt a process for adjusting that portfolio when they are wrong.

In our opinion, stretched valuations tell us that portfolios should be allocated more heavily towards alternative investments that can mitigate risk in a portfolio. Systematic trend following strategies (CTAs) and hedge funds look attractive, particularly global macro, market neutral, merger arbitrage, and long/short equity managers with expertise on the short side.

The economic backdrop is indicative of risk mitigation as well. Slowing growth and potential inflation tell us to focus on high quality factor exposures. In our opinion, a little liquidity or cash on the sidelines may not be a bad idea either.

Market sentiment and monetary policy are both very positive at this current moment, and thus supportive of risk taking. However, we believe that taking a relative strength approach and having a defined exit strategy are prudent here.

As Charles Schwab said most eloquently, “you control your decisions and you control how well you execute them; you don’t control the environment.” Our commitment is that we will stick to our process and execute decisions in a disciplined fashion – taking the emotion out of it, cutting our losses quickly, and letting our winners run.


WealthShield Quarterly Outlook | Q1 2020