Below you will find the Columbus strategy highlights for this month. For more insights and a detailed discussion, including to get the monthly allocations, please download the report by clicking the button at the bottom of this message.
- With the S&P500 making lower highs since January, some pundits are calling for a bear market (sell in May and go away?). Meanwhile, others are saying the correction is almost over and the bull market will resume soon.
- This is a time when data intelligence is most useful to help us sift through the noise and ensure we stay focused and invest rationally…
- Year-to-Date, Columbus is up 1.7% while the S&P500 (SPY) only gained 0.3%.
- Last month, Columbus switched to a conservative stance with a large position in its cash asset (SHY), while emphasizing commodities (DBC) and keeping a position in some equity markets (notably Japan). This shift greatly reduced the portfolio volatility for the month, especially when compared to equity markets.
- This month is mostly a continuation of the same. Our cash asset (SHY) is reduced to provide funds to increase the position in gold (GLD).
Emerging markets equities (VWO) are essentially eliminated from the portfolio. This support the “uncertainty theme” and a “risk off” approach.
- While currently conservative, it is worth repeating that Columbus is not necessarily 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 equity market correction while focusing on opportunities available in real assets (commodities and gold).
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.
Jean-Marc and the Laplace Insights team