Thursday, October 30, 2025
  • Login
Euro Times
No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
Euro Times
No Result
View All Result

The Markets in the Short-Term and the Plan in the Long-Term

by Brandon Bischof
September 20, 2022
in Finance
Reading Time: 3 mins read
A A
0
Home Finance
Share on FacebookShare on Twitter


Right now, the average investor’s appetite for risk appears to be low. According to Canterbury’s risk-adjusted rankings, the top two sectors are Utilities and Energy (which combine for 7.7% of the S&P 500’s market cap), while the bottom two sectors (out of 11) are Information Technology and Communications (which combine for 34% of the S&P 500’s market cap). In other words, sector leadership is favoring the smaller, “defensive” sectors. 

Speaking of defense, bonds have been anything but defensive. The twenty-year treasury bond ETF (Ticker: TLT) reached a new low for the year and its lowest level since early 2014.   That puts that ETF down -27% year-to-date. For the traditional conservative investor, bonds are supposed to be the risk-off asset. When the stock market goes down, the hit to their portfolio should theoretically be limited or offset by their bond holdings. That theory has not worked in 2022.

The Short-Term

Given the market’s decline last week, it should come as no surprise that the market is short-term oversold. One point we should establish is that overbought/oversold indicators do not tell us when the market will have a turning point and fluctuate up or down, nor do they tell us the extent of a kickback or drawdown. An oversold market can always become more oversold. During volatile markets, oversold or overbought conditions can hit extremes more often than they would in a normal market environment. These indicators are unconfirmed and very short-term, meaning it is best to act on them after there are some confirmations that the security or index wants to go up.

Here are two other points for the short-term. Currently, the Nasdaq’s weekly relative strength is flat. A positive indication for the market would be that the Nasdaq is leading the market, or S&P 500. That would show that investors have an increased appetite for risk. That is not the case right now, but it is better that the relative strength of the Nasdaq is flat as opposed to down. The other point is that there is a slight divergence in the Advance-Decline line, which measures the number of stocks rising versus falling. While the S&P 500 has put in a relative low for the last few weeks, the stocks-only AD Line has not. This is only a small positive for the market, as the Advance-Decline Line works as a better indicator for identifying major tops and bottoms, and not mid-cycle moves over the short-run.

The Long Term & Bottom Line

This is a bear market and Canterbury’s Market State Indicators have all turned negative. Those indicators are Long-term trend, Volatility and Short-term supply & demand. Bear markets often fluctuate in both directions, having large declines followed by large, short-term rallies. The markets have seen that several times this year. So, the question then becomes “for the long-term, what is the plan?”

Here is the positive: every bear market is eventually followed by a new bull market. That does not mean that your investment plan should be to just buy and hold for long-run, hoping to come out better on the other side. Bear markets can be devasting to investors and cost them years of compounding just trying to get back to breakeven. This is amplified by a falling bond market, where bonds are doing very little to offset portfolio risks.

The key to benefitting from a bear market, rather than being punished by it, is to mitigate portfolio fluctuations. We know that in the short-term, markets are going to fluctuate in both directions. Long-term success requires a series of short-term decisions. Adaptive portfolio management is all about managing the short-term fluctuations and positioning the portfolio to benefit in the long-term. The goal is to adapt the portfolio to manage each of the market’s up and down fluctuations. By limiting risk in the bear market, an adaptive portfolio can be better suited to compound in a bull market.

Canterbury’s adaptive portfolio, the Canterbury Portfolio Thermostat has been successful at adapting in this volatile market environment, by limiting declines to normal fluctuations and participating in the various short-term rallies the market has gone through. The portfolio maintains a high benefit of diversification, where the securities being held have lower correlation to each other. This has limited the number of “outlier” days (trading days beyond +/-1.50%) to just 7 trading days (which is expected). For reference, the S&P 500 has experienced 58 outlier trading days.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Source link

Tags: LongTermMarketsPlanShortTerm
Previous Post

The Final Crypto Crash? It’s Not Looking Good…

Next Post

Why most Americans are disappointed in the healthcare system — RT World News

Related Posts

Trump cuts fentanyl tariffs on China to 10% as Beijing delays rare earth curbs

Trump cuts fentanyl tariffs on China to 10% as Beijing delays rare earth curbs

by Kevin Breuninger,Anniek Bao,Evelyn Cheng
October 30, 2025
0

BUSAN, SOUTH KOREA - OCTOBER 30: U.S. President Donald Trump (R) speaks with Chinese language President Xi Jinping throughout a...

Stocks Pressured as Fed Chair Powell Downplays Further Rate Cuts

Stocks Pressured as Fed Chair Powell Downplays Further Rate Cuts

by Barchart
October 30, 2025
0

The S&P 500 Index ($SPX) (SPY) on Wednesday closed unchanged, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.16%, and the Nasdaq 100...

Frankenstein’s Money Press: How Washington Unleashed the Modern Monetary Monster

Frankenstein’s Money Press: How Washington Unleashed the Modern Monetary Monster

by Stefan Bartl
October 30, 2025
0

As soon as upon a midnight dreary, whereas I contemplated, weak and weary,Over many a quaint and curious chart of...

More than a million current account switches in year as bank apps attract savers

More than a million current account switches in year as bank apps attract savers

by Anna Wise
October 30, 2025
0

Signal as much as our free cash publication for funding evaluation and skilled recommendation that will help you construct wealthSignal...

Citibank to boost investment in India as firms eye global expansion: Viswas Raghavan

Citibank to boost investment in India as firms eye global expansion: Viswas Raghavan

by Shilpy Sinha, George Smith Alexander, Sruthijith KK
October 30, 2025
0

Citibank plans to deploy extra capital because it broadens the concentrate on India, Citi head of banking and govt vice...

The Trump Administration Is Lying Us Into Another War

The Trump Administration Is Lying Us Into Another War

by Connor O'Keeffe
October 29, 2025
0

Final week, President Trump ordered an plane service strike group into the waters off Venezuela. The deployment of the USS...

Next Post
Why most Americans are disappointed in the healthcare system — RT World News

Why most Americans are disappointed in the healthcare system — RT World News

The 5 best camping chairs of 2022

The 5 best camping chairs of 2022

This biotech stock has jumped nearly 50% in 3 months. Its CEO says business is ‘growing substantially’

This biotech stock has jumped nearly 50% in 3 months. Its CEO says business is ‘growing substantially’

October 30, 2025
Bitcoin Struggles To Hold Key Support: Could ,000 Be Next?

Bitcoin Struggles To Hold Key Support: Could $88,000 Be Next?

October 30, 2025
Xerox Holdings Corporation 2025 Q3 – Results – Earnings Call Presentation (NASDAQ:XRX) 2025-10-30

Xerox Holdings Corporation 2025 Q3 – Results – Earnings Call Presentation (NASDAQ:XRX) 2025-10-30

October 30, 2025
India stun Australia, enter ICC Women’s World Cup 2025 final in record chase

India stun Australia, enter ICC Women’s World Cup 2025 final in record chase

October 30, 2025
This Anker Prime Charger makes cable management a breeze

This Anker Prime Charger makes cable management a breeze

October 30, 2025
Israeli ultra-Orthodox Jews rally in Jerusalem against military service | Israel-Palestine conflict News

Israeli ultra-Orthodox Jews rally in Jerusalem against military service | Israel-Palestine conflict News

October 30, 2025
Euro Times

Get the latest news and follow the coverage of Business & Financial News, Stock Market Updates, Analysis, and more from the trusted sources.

CATEGORIES

  • Business
  • Cryptocurrency
  • Finance
  • Health
  • Investing
  • Markets
  • Politics
  • Stock Market
  • Technology
  • Uncategorized
  • World

LATEST UPDATES

This biotech stock has jumped nearly 50% in 3 months. Its CEO says business is ‘growing substantially’

Bitcoin Struggles To Hold Key Support: Could $88,000 Be Next?

  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In