Why We Don't Play The Chasing Game

August 9, 2017
Why We Don't Play The Chasing Game

Whether it's politics, world news, sports, or entertainment, the media and its prevailing headlines are typically driven by trends. How will Obamacare reform turn out? What's the latest on the Trump-Russia probe? How will the Lebron James - Kyrie Irving saga turnout for the Cleveland Cavaliers? Trends sell, and sometimes these topics can dominate headlines for months at a time.

As you may know, our portfolios are constructed using non-correlated asset classes which simply means when one asset class zigs, the other asset classes may zag with no correlation. Most recently, the best representation of this principle has been emerging markets, broadly defined as the market of an economy that is in the process of rapid growth and industrialization. This year, emerging markets has grabbed many of its own headlines as a top performing asset class. See below.

Today, emerging markets is "zigging" while another asset class is "zagging" (i.e. DFA US Small Value). Tomorrow the opposite might be true. Therefore, we build portfolios with diversified asset classes, then have the discipline to rebalance (sell high, buy low), and of course, remain invested.

Advisory services provided by TFO-TDC, LLC.

All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions, may materially alter the performance of your portfolio. There are no assurances that a portfolio will match or outperform any particular benchmark. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is not a guarantee of future investment success.

Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio. There are no assurances that a portfolio will match or outperform any particular benchmark.

Please contact your Investment Adviser should you have any questions regarding the information provided in this report.