Wealth Shield Update - Stop Out to Cash
Stop Out To Cash
On 01/21/2022 our Strategic Asset Management accounts were shifted out of stocks and into a defensive position.
Significant Trend Break
Investors are concerned about inflation, the Federal Reserve Bank turning off the printing press, and excessively high stock market valuations.
In my opinion the break in trend of the FAANG+M stock index (and other primary indices), given excessively high stock market valuations, represents an important signal. Investors that place capital preservation at the top of their priority list must consider shifting into a defensive allocation.
Here is a chart of the break in trend of the NASDAQ index (source: www.stockcharts.com)
Highcroft Wealth Shield
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. Wealth Shield acts as a brake when investments and markets generate downward momentum. This program is only available in our Strategic Asset Management (SAM) when managed with full discretion.
Shift into a Defensive Position
Our 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. With the breakdown in prices on the 21st of January we shifted our U.S. stock positions into cash and bonds. We are keeping our commodities position.
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.
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 1-05252743
DEFINITIONS
NASDAQ Composite Index - is the market capitalization-weighted index of over 2,500 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities.
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.
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.
To the extent you are receiving investment advice from a separately registered independent investment advisor or broker, please note that Highcroft Investment Advisors, Gerald Asplund, and LPL Financial are not an affiliate of and makes no representation with respect to such entity.
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.
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.