"Conviction is worthless unless it is converted into conduct." - Thomas Carlyle

 

After a relatively volatile quarter, equities (S&P 500) ended with a 1.0% gain. A sell-off in July was quickly erased with an almost 4% run in August. September finished -1.5%, mostly on the angst of the global economic recovery and geopolitical tensions. Despite the headlines, the S&P 500 remains positive at +7.8% YTD and the All Country World Index (ACWI) at +3.7% YTD.

 

The ACWI has been stifled by a strengthening U.S. Dollar and stumbling global economies such as Europe and Japan. While international stocks may be advancing, weakened currencies exacerbated the decline for U.S. Dollar-invested funds and investors. Throughout the volatility and uncertainty, our portfolios remained grounded in their conviction and stayed invested as the four dimensions from which we assess market outlook (Technical, Sentiment, Macroeconomic, and Valuation) continued to display positive signals as a whole. Our CAN SLIM® strategy remained roughly at 90% equity invested throughout the month while our Tactical Growth ETF stayed 87% invested with a mix of U.S. and international equities.

 

As we head into the homestretch of the year, our attention now turns to Q3 earnings season with continued emphasis on central bank strategists in Europe and economic developments in Japan. Short-term volatility is inevitable and news headlines will create concern, but our current posture remains bullish as the data continues to show an opportunity to make money in this environment.