November 10, 2020
We entered the month knowing that during an election year October is typically a poor month for stock performance. This is exactly how things went, too, for U.S. equities. After running upward for close to half the month, markets closed October on a down note. There are likely multiple reasons for this including the related factors of an increase in COVID cases paired with the lack of congress to pass a new fiscal stimulus package.
Election uncertainty seems to have played a role, too, but this particular factor is difficult to quantify. We do know, however, that markets abhor uncertainty so taking this into account, especially in light of a particularly contentious Presidential race, it seems reasonable to believe that this was a factor of some consideration.
The S&P 500 fell 4.1% in the final week of October which was enough to move the index into negative returns for the month. In fact, all three major US indices including the S&P 500, the Dow Jones Industrial Average, and the NASDAQ all finished in the red for the month of October.
Tactical Growth’s allocation on October 1 was 68% U.S. Equities, 10.5% Fixed Income, 5.5% Precious Metals, and 16% Money Market. On the 20th we moved 5% from Money Market into the Small Cap Value sector.
On the 29th we sold half of our Gold Mining holdings to money market. Our holdings at the end of October are % U.S. Equity, 10.5% Fixed-Income, 2.5% Precious Metals, and 16% Money Market. Volatility and negative price action in October weakened rankings across the board and we maintained our high cash weighting into the Election.
For October, the Stadion Tactical Growth Fund Class I returned -2.09% versus its benchmark Morningstar Moderately Aggressive Target Risk which returned -1.54%.
To view the most recent performance for the Stadion Tactical Growth Fund, click here.
The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock prices.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange.
The NASDAQ Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market and it is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies.
The Morningstar Target Risk Index family is designed to meet the needs of investors who would like to maintain a target level of equity exposure through a portfolio diversified across equities, bonds and inflation-hedged instruments. The Morningstar Moderately Aggressive Target Risk Index seeks approximately 80% global equity exposure.
One cannot invest directly in an index.
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