Market and Performance Update – November

Market and Performance Update

The stock market surprised us to the upside in October. The Dow had its best monthly performance in years. In fact, at a 13.95% return for the month, it made more in October that it had in four out of the last eight YEARS! All our indexes were up for the month. The S&P 500 grew by 7.98%, the NASDAQ by 3.9% and the Russell 2000 by 10.93%. However, they all remain negative for the year. 

By the time you receive this newsletter, we will know the outcome of the mid-term elections all across the country. I can imagine two scenarios for the stock market, one good, one bad. If it looks as if the economy will continue to falter, we could be in for another few months of poor stock market returns. If the economy gets better, if the supply chain issues improve, if gasoline and heating oil becomes more plentiful and less expensive, if grocery and everyday goods prices moderate and refill our store shelves, then the stock market could see some good growth into next year. However, no one can predict, with any accuracy, what actually will happen… until it does. 

Our goal is, and has always been, to give our clients a good long-term return on their assets. 

As you know, we manage several models of equity accounts. We use index ETF’s as our investments, and we make trades whenever our research calls for it. We made our last adjustment to the rules we use regarding when we trade in our Moderate, Growth and Aggressive accounts in May, 2019. Our last adjustment we made in our Conservative model rules came in 2020. Since that time, our models have performed very well. However, most retail financial advisors will not be managing their clients’ assets the way we do. 

First, you have these guys that sell fixed index annuities that spend most of their time trying to scare you about the stock market. If the market is going up they’ll tell you they see a crash coming that ‘could’ wipe you out and have you living in poverty for the rest of your retired life. They see their job as one who is supposed to make you anxious about the future. Then they can swoop in and give you the guarantees you need and deserve. If the market is struggling, as it has so far this year, they tell you about how none of their clients have lost a penny in the stock market and how well they sleep at night. But do they ever mention how mediocre their returns have to necessarily be for you to get those guarantees? I’ve never heard them mention it. 

On the other hand, there are real, securities licensed financial advisors that have been taught to put their clients in investments that closely track what the overall stock market is doing. The employers of these advisors know that the market will sometimes have losing years. And sometimes those losses will be pretty bad. So if that advisor’s client calls him to complain about his investment’s poor performance, he can just say that the whole market is down and it’s being ‘unkind’ to investors right now. Those companies convince their advisors that buy and hold is the best way to own stocks, using the “Ten Best Days” myth, among other contrived comparisons to get investors to think that nobody can perform better than the market, ever. It also gives them, as well as the annuity salesmen, an excuse to invest your money in their preferred investment, then let it ride. They may monitor it occasionally, especially when it’s time for that client to come back in, but that’s about it. 

This is where ProVest Wealth Advisors is different. We are a trend-following advisory. We believe the market does develop trends, because we have observed those trends time and time again. We buy very sophisticated research that can spot trends early and give us the signals of when and what to buy or sell. Just like all research, it’s not perfect. But we have been able to perform at a much higher level than the fixed index annuities we are familiar with, and we’ve been able to create a much smoother ride for our clients that those that stick with buy and hold all the time. We have to stay up-to-date every day, because we never know when we will receive a trade signal. That means we have to work a lot harder for our clients than the annuity and the buy and hold advisors do, but we believe our clients are worth the extra effort. Are you worth the extra effort? If you have a portfolio of at least $200,000 of investible assets, why don’t you give me, Noel B. Swain, CFP, a call today. You just may find someone who is willing to work a lot harder for you that what you are used to.

Nature of Humans

Many of you may know that in 2014 my office of 31 years burned to the ground in a freak accident. We moved to some interim space for a few months, then found our current office after a few months. When we were setting this office up, I hired a recommended person to do our weekly cleaning. Miguel has always done a magnificent job. He is from Peru, his English is fairly broken, but he tries really hard to communicate with me in an effective way. He and his family are here legally, something I made sure of before I hired him. His wife, Rosa, helps him clean the businesses who have hired him. In the eight years we’ve been in this office, his work is just as good now as it was when he started. 

That’s the setup. This is the story. One recent Saturday I stopped by my office while Miguel was here. When he cleans my office, he brings his three children along and has them sit and read (one is a newborn) while he and Rosa clean. When I came in the office, I noticed their daughter, who is seven, sitting and reading in my reception area. I inquired as to where her older (9) brother was. He was in the back, reading a book about the “real Abraham Lincoln.” He told me that Lincoln was a great man, but Mary Todd Lincoln, Abraham’s wife, was not such a nice person, something I didn’t know. 

I then got in a discussion with Miguel about what his children do while he and Rosa are working. He said, “I am from Peru, but we came here to America for the opportunity. Peru is the country I left. I am an American, now. My children will learn about America, and how great this country is. That is why they are reading about Abraham Lincoln and Thomas Jefferson. 

We all see on TV and read in the papers about our southern border being overrun with illegals from South American countries. I, like most people I know, have a problem with it. When people come to our country illegally, and carrying the flag from their country of origin, I wonder why they’re coming. If they love their country so much why don’t they stay there and make their country better? And if their first act in coming to this country is to break our laws, what does that say about them?

No, Miguel came here the right way. He is raising a family of America-loving children. He is living the American Dream by starting and running his own small business. He’s becoming an American the right way. And I’m proud to have hired him and to call him my friend.