How do you have a successful investment experience over the course of your lifetime?  Over the last six months, the stock market has rocked and rolled leaving many to question the fate of their portfolio’s future.

Notice how I only mentioned the stock market?  The stock market plays a vital role in any investment portfolio, but not the only part.  Successful investing occurs with multiple asset classes working in unison to create both portfolio stability and consistency.

Do you remember our approach of economic balance?

The illustration above details how the four asset classes we own react during different phases of the economic cycle.  Each asset class will rise and fall in value at different times depending on where we stand.  By diversifying based on the economy, we can create a dependable portfolio allocation that we believe will deliver consistent capital appreciation over time.

But 2020 is different…

Yes, it has been a bizarre year, but the economic principles that drive capital productivity have stayed the same.

Asset Class Returns (Year to Date)*
Stocks Intermediate-Term Bonds Long-Term Bonds Gold Cash
-3.1% 8.0%    21.9%   17.1%   0.0%
*  Stocks (S&P 500), are represented by the index fund SWPPX, Intermediate-term bonds represented by the ETF – BIV, Long-term Bonds represented by the ETF – TLT, Gold represented by the ETF – GLD.

  All returns reported by Morningstar as of 6/30/2020

Sounds easy enough right?  The approach we’ve designed has virtually a 100-year (and counting) history of effectively growing wealth.  However, it is completely useless when it comes up against bad investment behavior, rooted in not understanding or grasping the power of the economic balance we’ve structured. 

You cannot make a portfolio outcome assessment considering only stocks.  All four asset classes are critical players that should not be overlooked or abandoned because one performs better than the other in this year or another.  They all have their place.

Remember this graphic taken from Carl Richards book titled The Behavior Gap?  The message and consequences of succumbing to the temptation of our emotions cannot be illustrated any better.


The key to not falling prey to current-event induced emotions is to recognize that a well-designed allocation prepares for future events but doesn’t predict them.

We have no control over what will happen. No one does.  But what will be good (or bad) for one asset class we hold is usually counterbalanced by movements in the other asset classes we hold.

Sticking with the plan as designed, we believe, will offer to you the greatest opportunity to in fact “have that successful investment experience over the course of your life”.  As a firm, we personally follow the above principles for ourselves and our families.

“It is simply the best approach to long-term investment success I ever come across over the last forty years of studying how markets work.” – Bo Billeaud

If you would like to know more about our All-Weather portfolios, give us a call or email us at