HIGHCROFT WEALTH SHIELD PROTECTS CAPITAL Q1 2020
Summary
The stock market has crashed due to high valuations and corona virus concerns.
SAM Investment accounts in our office have been protected and their values preserved.
The Highcroft Wealth Shield discipline stopped us out of the stock market, shifting client assets into cash and bonds, preventing big losses.
Stock Market Crash
The Value Line Geometric Index, a U.S. stock market index comprised of the largest 1,675 stocks in the United States (equally weighted) has quickly fallen -44% (as of 03/23/2020), ending the quarter down -35.82% (as of 03/31/2020). This market has fallen dramatically due to concerns relating to the corona virus outbreak and has certainly been exacerbated by high valuations. (source www.stockcharts.com)
Highcroft Wealth Shield – preserving account values
Our Highcroft Wealth Shield, rules-based discipline is designed to help prevent large losses in investment accounts. This service is only available in our Strategic Asset Management accounts that are managed on a discretionary basis by Gerald Asplund. For more information please reference the disclosure information below.
Balanced Allocation has retained its’ Value
Year to date, through 03/31/2020, the Balanced Allocation accounts in our Strategic Asset Management program in our office have basically preserved their value with a year to date return of -1.58% (source LPL Portfolio Manager reporting system). The accounts have almost fully retained their values versus a significantly large drop for the stock market.
Note: past performance is not an indication of future results and expectations might not materialize. Current investor concerns could evaporate as fast as they occurred.
LPL 1-05255692
DEFINITIONS
Trailing Stop - The term stop loss refers to a general strategy whereby investors desire to limit declines in their investment holdings and avoid participating in a significant drawdown. The strategy does not eliminate the possibility of loss, it is designed rather to cut short the trend of continued losses. The strategy can lock in gains.
Trailing Stop Order - A trailing stop order is setting a stop condition, creating a moving (i.e. trailing) activation price. Trailing stop orders have unique risks which include but are not limited to:
· Trailing stop prices are not guaranteed execution prices. The price at which a stop order ultimately is executed may be very different from the stop price.
· Trailing stop orders may be triggered by a short-lived, dramatic price change. During volatile market conditions the price of a stock can move significantly in a short period of time and trigger an execution of a stop order.
· Trailing Sell stop orders my exacerbate declines during times of extreme volatility. Activation of sell stop orders may add downward price pressure on a security.
· Trailing stop orders face risk from mechanical malfunction, system disruptions, some types of corporate actions (e.g. cash dividends), and bad price ticks; among other factors.
· This service may be discontinued or limited at any time and without prior notice.
Value Line Geometric Index - The Value Line Composite Index is a stock index containing approximately 1,675 companies from the NYSE, American Stock Exchange, Nasdaq, Toronto, and over-the-counter markets. The Value Line Composite Index has two forms: The Value Line Geometric Composite Index (the original equally weighted index) and the Value Line Arithmetic Composite Index (an index which mirrors changes if a portfolio held equal amounts of stock.)
Highcroft Wealth Shield –Highcroft Investments Advisor’s Wealth Shield program is a discipline that has capital preservation as its’ primary objective. Using a rules-based system the program exits equity investments that have broken trend, shifting those investments into cash, high quality bonds, or another equity investment (a defensive position). The discipline helps to limit losses or lock in gains, preventing potential precipitous declines. We believe that investment management should comprise a plan for growth of assets as well as preservation of assets.
Wealth Shield acts as a brake when investments and markets generate downward momentum. The rules-based system is designed to help preserve capital and help avoid investments that are in a bear trend. When an investment shifts from bull to bear trend we can sell that investment and shift the sale proceeds into a defensive position. The discipline can result in all equity investments being shifted into cash.
The Highcroft Wealth Shield program is only available in the Strategic Asset Management (SAM) account managed on a full discretion basis in the Highcroft Investment Advisors office by Gerald Asplund, the program is not applied to other SAM accounts or to any brokerage or 401k accounts.
Highcroft Wealth Shield Availability - The Highcroft Wealth Shield program is only available in the Strategic Asset Management (SAM) account managed on a full discretion basis in the Highcroft Investment Advisors office by Gerald Asplund, the program is not applied to other SAM accounts or to any brokerage or 401k accounts.
IMPORTANT DISCLOSURES
This correspondence expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein and may be subject to change without notice. Neither Highcroft Investment Advisors, Gerald Asplund, nor LPL Financial, has no duty or obligation to update the information contained herein.
The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. This memorandum is being made available for educational purposes only and should not be used for any other purpose.
Some of the statements may be regarded as forward-looking statements. Forward-looking statements are, by their nature, subject to uncertainty. Forward-looking statements may include assumptions relating to future investment and economic scenarios. When used herein, the words “anticipate”, “believe”, “could”, “estimate”, “expect”, “going forward”, “intend”, “may”, “ought to”, “plan”, “project”, “seek”, “should”, “will”, “would” and similar expressions are intended to identify forward-looking statements. These forward-looking statements reflect an opinion relating to future events and are not a guarantee of future performance or developments. Reliance on any forward-looking statements involves known and unknown risks and uncertainties. Actual results and events may differ materially from information contained in the forward-looking statemen ts as a result of a number of factors. Accordingly, you should be prudent with your reliance on any forward-looking information or statements.
Investing involves risks including possible loss of principal. Past performance does not guarantee future results. Any investment or investment strategy outlined herein are not suitable for all investors, readers should conduct their own review and exercise judgment prior to investing. Wherever there is the potential for profit there is also the possibility of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. The fast price swings in commodities and currencies can result in significant volatility within an investor's holdings.
Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources. The economic forecasts set forth in this material may not develop as predicted.
Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer.
The sources from which information has been obtained is assumed to be reliable; the accuracy of such information is not guaranteed and the accuracy and completeness of such information has not been independently verified.
From time to time the publisher, his associates or members of his family may have a position in any securities that may have been mentioned in this report:
This report, including the information contained herein, has been prepared exclusively for the use of Highcroft Investment Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Highcroft Investment Advisors.
All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results. Investing in the index would require investors purchase an investment product, which would involve fees and expenses.
ABOUT US
The advisors at Highcroft Investment Advisors provide retirement planning, investment management, financial planning, fiduciary investment management, and lifetime income planning. Certified Financial Planner. Working with business owners, individuals, and wealthy families near Wayzata, Minnetonka, Plymouth, Orono, Minnetrista, and Minneapolis Minnesota (55402, 55391, 55447, 55364, 55428).
The advisors at Highcroft Investment Advisors serve as a 3(21) and 3(38) Investment Fiduciary and fiduciary for labor union supplemental 401(k) and pension plans and corporate 401(k) plans. The advisors at Highcroft work with the union's counsel, recordkeeper, administrator, and the plan's trustees. United Association, Plumbers, Pipefitters, Steamfitters, IBEW, and Carpenters. Serving Wisconsin and Minnesota. 401(k) investment advisory services provided through LPL Financial's corporate RIA - offering 3(21) and 3(38) services.
Working with business owners, individuals, and wealthy families near Wayzata, Minnetonka, Plymouth, Orono, Minnetrista, and Minneapolis Minnesota (55402, 55391, 55447, 55364, 55428). As independent financial advisors we are not driven by certain products or services, instead we focus on your needs as an individual. Services include investment fiduciary fee only, retirement and divorce financial planning, life insurance, capital preservation, lifetime income planning, bonds, stocks, ETF, income, IRA, brokerage, rollover IRAs. Financial advisor near me, financial planner near me, independent planner near me.