Is it time for the market to crash?

I’m very proud to have consistently outperformed the S&P 500 for years. The best part is that this is due to a workflow that is repeatable and measurable.

Having this type of clarity in your analysis removes the emotional side of investing. I’ve noticed from experience emotions rise when certainty falls. When you need to make judgments on the spot on whether to hold or close based on no clear process, that is when emotions run high and the big mistakes happen.

So, what should we do right now?

Right now, we are in a macro dynamic of slowing growth and slowing inflation. While this is the worst possible dynamic for the broad stock market's performance, I don’t feel compelled to make any big predictions about whether the market is about to crash.

All we need to do is stay calm and follow the data about what sectors have historically performed well in this dynamic.

At the start of the current quarter, we changed from slowing growth and rising inflation to slowing growth and falling inflation. I got out of Technology and started to build a more defensive portfolio.

I’m delighted with this move as the Technology sector (XLK) is the worst-performing sector quarter-to-date, down -8% since the start of July.

Unsurprisingly, the best-performing sectors are the defensive staples proven to work well in the current dynamic. We have been signaling to build exposure to these all quarter long.

Some include:

· Utilities (XLU), which is up +12% in the Quarter to date.

· Consumer Staples (XLP), which is up +8% in the Quarter to date.

· Real Estate (XLRE), which is up +15% in the Quarter to date.

How to Harness the Power of This Process

People sometimes mistakenly think they need to invest in single stocks to enjoy real outperformance and big moves. If you look at the divergence between XLK and XLRE above you can see this is not the case.

Macro Investing offers a ton of upside while you enjoy more stability and require a fraction of the time required to build and manage your portfolio.

To help you harness the power of macro investing I’ve created a course to help you construct your personal portfolio.

ACCESS THE COURSE

Best of luck in the markets!
Philippe Tjantele