For over a quarter century, NorthCoast has been mindful of one key principle, creating a good long-term track record is more often built by avoiding losses as opposed to booking big gains. Every year since our founding in 1988, we have offered tactical investment portfolios that move to cash in an effort to avoid steep losses. It was this belief, coupled with our long-term performance that attracted Investor’s Business Daily (IBD) to partner with us in January 2006. We proved our mettle during the bear markets of 2000-2002 and 2008-2009 by preserving capital in client accounts.

In the midst of the stock market's swoon, it's important to keep things in perspective. Let's look back at recent history:

Does 7/7/11 – 10/4/11 look that scary now? -20.8% peak to trough (drawdown) on S&P 500 over a 3-month period... It traded higher by the end of February 2012.

What about the October 2014 correction, 9/19/14 – 10/15/14? Does that look scary now?  -9.4% peak to trough... Traded higher by mid-November 2014.

“Active funds and strategies are underperforming passive indices recently. And they’re cheaper too. Why not move my money to a passive strategy?” 

Response by: Joe Merkle, Client Advisor