- Since 1995, the crossover of the 12-month EMA and the 20-month EMA have been reliable indicators of trend; while not perfect timing indicator for tops and bottoms, following this simple metric would keep investors on the right side of the trend. Of course, there is no way to know whether this will hold true in the current cycle.
- The S&P 500 has only traded below
Fifteen years ago, Wespac Advisors set out to develop a new approach to investment management to cope with what we saw as the new market reality – the boom and bust cycle from 1995-2002. The world had changed, and Wespac felt that investment management had to change to continue to generate the returns and safety that our clients expected. Since we developed our new approach, we were tested with yet another boom cycle from 2003-2007, the bust cycle in 2008, and now another boom cycle from 2009 through today. Our returns for our clients demonstrate the success of our new approach across some violent markets.
The environment after the 2008 Crisis has continued to change. The link between economic and earnings fundamentals and the markets has become stretched. Central banks around the globe are shamelessly targeting asset prices with monetary policy. Corporations are indulging in financial engineering and stock buybacks, clouding earnings performance. The markets are buffeted daily by the micro boom and bust cycles caused by high frequency trading. The environment is getting even more challenging.
The uncertainty and volatility of the markets over the past 20 years calls into question conventional investment management. Most investment management strategies are based on predictions of the future and speculation about how securities will behave in that context. Wespac Advisors believes that a more flexible and adaptive processes is required to safely manage assets in this environment.
“Well, I never heard it before, but it sounds uncommon nonsense.” - Alice in Wonderland
“Well, I never heard it before, but it sounds uncommon nonsense.”
- Alice in Wonderland