Exploring the Matrix
What is it?
The Matrix is a tool we use as a part of our investment process. We use it to visualize the market strength of securities we are using in our models based on indicators we use.
We decided that it would be beneficial to share with you a screenshot of our matrix from time to time to help explain our portfolio decisions.
Here’s a screenshot of the matrix of market factors we keep track of.
Source: Breakaway Financial Group
Why does it matter?
Our tactical management approach attempts to help us invest in securities that have strong momentum and avoid the ones that are trending weaker.
Currently, the best performing factors are gold (GLD), the 2 and 10-year interest rates (2YR and TNX), and the price of oil (OIL). VT, which is a fund that tracks the global stock market, has been trending weaker recently.
We use these factors to create asset allocations based on your financial planning needs. Going forward, we will also share a view on the Matrix to explain changes to the models used in our clients’ portfolios.
Flight to safety intensifies as Russia unleashes attack on Ukraine
What is it?
“Russia has launched an attack on Ukraine during the Asian trading hours and triggered an intense flight to safety in financial markets.”
The following quote from February 24, 2022 sheds some light on the subject. “Russia is reportedly unleashing cyberattacks and Ukraine is said to have shot down several Russian planes and a helicopter. Reflecting the risk-averse market environment, the 10-year US Treasury bond yield is down 5% and US stocks futures indexes are losing between 2% and 2.3%. Crude oil prices are surging higher and the barrel of West Texas Intermediate (WTI) was last seen trading at its highest level since August 2014 above $96.“*
Why does it matter?
As the new headline dominating the investment world, the Russian invasion is changing the global economic landscape. We aim to stay on top of this development since these market implications seem to be creating evolving risks and opportunities. In conclusion, we hope to follow our process and not get wrapped up in emotional investing as certain risks begin to mount and opportunities present themself.
Other articles I found interesting this week:
Markets Prepare for Russian Invasion of Ukraine
Tesla: SEC is violating its own rules by holding up $40M shareholder payout
Gold prices pop to one-year high as Russia invades Ukraine
Current 401(k) portfolio
Our last portfolio reallocation: 1/31/2022.
Want more information?
The weekly market update 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:
*Eren Sengezer. “Forex Today: Flight to safety intensifies as Russia unleashes attack on Ukraine”. 2/24/2022. FX Street. https://www.fxstreet.com/news/forex-today-flight-to-safety-intensifies-as-russia-unleashes-attack-on-ukraine-202202240634
