All will force you to pivot
My son recently completed an Advance Kayaking camp where he went through Class IV Rapids, over waterfalls, and had to demonstrate proficiency with some technical maneuvers like rolls.
During the camp there was a raw sewage leak in the James River - not ideal conditions for a kayaking camp unless Conjunctivitis is one of the certification prerequisites.
The camp made the decision to take the kids upstream so they could get their certification. They spent a lot of time in a van, but they got the job done...they adapted.
While on vacation this year in Oregon, we were making our way from the high desert to the Oregon Coast. The road we were going to take was closed earlier that morning because of a Forest Fires.
Luckily, we caught it early so we didn’t have to backtrack - but our plans to go to Crater Lake and some other sites were impacted. We had to pivot and adapt. As a result, we got to see this…
My models rely heavily on Price and Momentum Trends. Some trends have ended, but that doesn’t necessarily mean news ones have started. Here are 3 examples.
This is the relationship between the Global Index and the Global Minimum Volatility Index. We are waiting to see which way the trend breaks - right now we are rudderless.
This is the relationship between Long-Term Bonds and Short-Term Bonds. Long-Term Bonds are currently in favor which goes against the media narrative. It makes you question everything - the model, the media, and the strength of our recovery.
Emerging Market Bonds, despite the recent political turmoil in China, remain favorable over the US Bond Index. However, it is sitting in a place waiting for a clear trend to develop as one doesn’t have a clear advantage over the other.
The bottom line is that life is about adapting and sometimes adapting is unexpected, on an inconvenient timeline, or not comfortable. However, adapting should be setting us up to grow and become less fragile and if you are lucky enough gain the benefit of some unexpected positive benefits. That’s true in life and in your investment portfolio.