Market Insight April 18, 2022

Defensive stocks prevail over benchmarks.

Defensive Stocks Prevail 

What is it? 

Markets have been struggling to make new highs lately. However, defensive stocks like the Invesco S&P 500 Low Volatility ETF (SPLV) have been outperforming the broader U.S. market index such as SPY. This is shown in the chart below from Yahoo Finance. Over the last three months ending on April 13th, 2022 SPLV (Orange) is up 2.2% while the benchmark SPY (Blue) is down 5.6%. 

*Yahoo Finance

Why does it matter?

As defensive stocks got overbought last week we decided to sell some on Thursday. This allowed us to realize some gains in various portfolios. We did this by selling a small number of our positions in defensive stock sector ETFs along with SPLV. 

Blitz Index

What is it? 

The Blitz Index is a tool we created to help determine how aggressive our stock allocation should be. When factors that include changes in monetary policy, interest rates, and stock performance are bullish then we are more likely to add to our target exposure. It is our version of the Super Model which was create by legendary investor Martin Zweig. When factors are becoming more bearish, then our long equity exposure may be lowered accordingly. 

While we analyze data daily around investments, the Blitz Index is beneficial since it provides a less volatile form of analysis. The Blitz index uses variables that change typically on a weekly or monthly basis. We believe that these monthly and weekly data points are more important than the day-to-day changes or noise in the markets. 

Why does it matter?

The Blitz Index is currently showing a score of 4 out of 10 which is relatively bearish. Which is more evidence that we can take to justify our decision to lower stock market exposure.

Other articles we found interesting this week:

Elon Musk offers to buy 100% of Twitter for $54 a share

U.S. Banks’ Pandemic Hot Streak Is Coming to an End

Forex Today: Euro rebounds as focus shifts to ECB policy announcements

Current 401(k) portfolio

Our last portfolio reallocation: 4/11/2022. 

Want more information?

The weekly market insight provides a window into the process we use in our investment management process. At Breakaway, we believe markets are always changing and require a nimble yet data-oriented approach. 

Our process attempts to identify trends and momentum in the financial markets. With that information, we align our clients’ portfolio accordingly in the hope to help our clients accomplish their life goals while attempting to lower the risk of a large drop in their portfolio.

Click here for more details about our investment management

Sources:

*Yahoo Finance Chart. “Invesco S&P 500 Low Volatility ETF (SPLV)”. 4/14/2022. Yahoo Finance. https://finance.yahoo.com/quote/SPLV/chart?p=SPLV

IMPORTANT DISCLOSURES: 

Educational use Only. The market update published by Breakaway Financial Group LLC (“Breakaway”) is intended to be educational in nature and is not intended to be a recommendation for any specific investment product, strategy, plan feature or other purposes. Accordingly, it should not be construed by any consumer and/or prospective client as solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation. 

Advertising and Marketing. Communications such as this are not impartial and are provided in connection with advertising and marketing. This material is not suggesting a specific course of action or any action at all. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, insurance, legal or tax professional that takes into account all of the particular facts and circumstances of an investor’s own situation. No person associated with Breakaway is a licensed attorney or tax professional and the information contained herein should not be considered tax or legal advice. 

Links to Third Party Content. This Market Update contains links to articles or other information maintained by unrelated third parties. You acknowledge and agree to the following: All such information is provided solely for convenience purposes only because we believe that it may provide useful content. and all users thereof should be guided accordingly. We disclaim any responsibility for the link’s performance or interaction with your computer, its security and privacy policies and practices, and any consequences that may result from visiting it.  We do not control the content published by the third-party; we do not guarantee any claims made on it, nor do we endorse its sponsor or any of the content, policies, activities, products or services offered by any advertiser on the site. Breakaway assumes no liability for any inaccuracies, errors or omissions in or from any data or other information provided by the third party and inclusion or reference by Breakaway to any third party link should not be construed by any consumer and/or prospective client as a solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. 

Important Information regarding Registration Breakaway and/or Patrick Traverse offer Investment advisory and financial planning services through Belpointe Asset Management, LLC, (“Belpointe”) 500 Damonte Ranch, Parkway Building 700, Unit 700, Reno, NV 89521, an investment adviser registered with the Securities and Exchange Commission (“SEC”). Registration with the SEC should not be construed to imply that the SEC has approved or endorsed qualifications or the services Belpointe offers, or that its personnel possess a particular level of skill, expertise or training. It is important to read disclosures pertaining to Belpointe Asset Management at this link https://belpointeasset.com/disclosure/.  Breakaway is not affiliated with Belpointe. Additional information about Belpointe and Patrick Traverse is available on the SEC’s website at www.adviserinfo.sec.gov.

Craig Stahlecker

Craig Stahlecker

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IMPORTANT DISCLOSURES:
The information provided is intended to be educational in nature and is not intended to be a recommendation for any specific business or tax strategy, plan feature or other purposes. Accordingly, it should not be construed by any consumer and/or prospective client as solicitation of services.

Communications such as this are not impartial and are provided in connection with advertising and marketing. This material is not suggesting a specific course of action or any action at all. Prior to making any business or tax planning decisions, an individual should seek individualized advice from a personal financial, tax, legal, or business consultant professional that takes into account all of the particular facts and circumstances of an individual’s own situation. No person associated with Breakaway Financial Group LLC is a licensed attorney, and the information contained herein should not be considered legal advice.