Moving Back to the Standard Methodology

Yesterday, November 2, 2020, we began to buy stocks in order to move back to the standard asset allocations calculated by our model. As you may remember, it was in February that I sold stocks and real estate because I thought the markets were not pricing in the impact of COVID at all.

Three days later, the bottom fell out of the stock market and the rest is history. Since then, I’ve been trading in stocks by buying on the way down and selling on the way up because volatility was much much higher than normal. Also, asset class correlations departed from normal. So my top priority was managing risk.

Now, market volatility is beginning to decrease and is approaching “normal” levels. Asset class correlations are beginning to approach normal also. So, we are planning to move back to our “normal” models if this trend continues after today’s election.

Be safe.