Columbus Strategy Report – September 2018 Edition

Is the Correction Over Yet?

  • Year-to-Date, Columbus is up 2.7% while our world allocation benchmark (GMWAX) is down -1.2% and our 60/40 global stocks/bonds benchmark (VSMGX) is up 2.8%.  Meanwhile, the S&P 500 (SPY) gained 9.7% YTD on the back of a strong August follow-through.
  • Many pundits were making alarming statements last month.  For example, Morgan Stanley said to “prepare for the biggest stock market selloff in months”.
  • What a difference a month can make!  Indeed, much has changed since July and it looks like the correction that started in February has come to an end.
  • Columbus is adapting accordingly and shifting to a more aggressive stance for September.  It is increasing its position in real-estate (VNQ), and taking new positions in small/mid cap stocks (VXF) as well as in large cap stocks / S&P500 (SPY).  A relatively small position is maintained in the US Dollar Bullish index (UUP) albeit this is greatly reduced from last month’s allocation.

I encourage you to download the report and read the discussion in section 6.

Investing is all about risk management and related probabilities, both of which are foundational to growing client’s wealth in the long run.  Many of the uncertainties surrounding the market and the economy this summer remain despite the recent gains in US stocks.  Therefore, and in spite of the current promising market situation, Columbus may quickly revert back to a conservative view should the situation degrade again over the coming months.

Please don’t hesitate to contact me should you have any questions.

Best regards,

Laplace Insights Team

Overview