Time for Active Management
We have reached the end game for passive investment management.
Despite record valuations and the portfolio drawdowns and volatility we saw just this last April, passive (buy-and-hold) continues to be the default strategy for most investors, financial academics, and the Wall Street giants. The paradigm has been hard-wired into the system. After all, it's worked for forty-five years.
Monitoring the
Magnificent 7
The mechanical implementation of passive strategies creates poorly understood feedback loops that are today significantly distorting the valuations of a handfull of very large companies.
The growing disconnect between price and value for these issues is becoming a threat to the viability of the financial system. Your portfolio needs to be able to manage threat . . .
The KP Trend Model identifies the underlying trend of US equities.
Since May 15 of this year, it's been in a fully-invested Green status, after a brief visit to Yellow and even a few days in Red during the chaotic days at the beginning of April.
The Green condition has dominated the US market environment for the past quarter century and is characterized by high returns and low volatility . . .
Identifying Market Trends
The performance of a portfolio of equities is dominated by market trends, not by selections of individual invest-ments.
Forecasting these trends is very challenging, yet even a partially successful effort to manage market risk can significantly reduce portfolio volatility and drawdown . . .
