Below you will find the Columbus strategy key highlights for this month. For a more detailed discussion, including to get the monthly allocations, please download the report by clicking the button at the bottom of this message.
Columbus is Turning Conservative for April…
- Columbus is flat YTD whereas the S&P500 lost 2.2% YTD.
- For the past year, both Columbus and the S&P500 gained 12.5%.
- The month of March was characterized by a continuation of the volatility observed in February. At the time of this writing, the market is now once again approaching its February lows.
- Last month, Columbus stayed in a “risk-on” situation with a continued emphasis on equities and commodities despite the February volatility.
- We reviewed the rationale for this in last month’s report, and in particular highlighted the asset class clustering and their relatively wide separations.
- This month is quite different. The continued volatility, combined with a meaningful loss of momentum in equities are inciting the Columbus Algorithm to take a conservative stance.
- Gold and especially commodities are now center stage. Equity positions are greatly reduced, and Columbus is even taking a substantial position in short-term treasuries (SHY), our cash asset.
- Columbus is behaving exactly as we would expect. With growing uncertainties in the markets, it is now becoming a lot more conservative in its allocation selections.
- Note that Columbus is not predicting a bear market. Rather, it is adapting to the current situation. Should the equity bull market resume in the next months, Columbus will once again emphasize equities and attempt to capture those gains.
In the meantime, however, Columbus is adjusting for the possibility of a deeper market correction. As the saying goes, better safe than sorry!
I encourage you to download the report and read the discussion in section 6 to learn more about Columbus’ portfolio allocation decisions and the related rationale.
Please don’t hesitate to contact me should you have any questions. In the meantime, happy investing!
Jean-Marc and the Laplace Insights team