News & Investment Updates From Ribbon Falls Wealth Management
News
How Trend Following Handles Market Shocks & Drawdowns
People often disagree about the best way to board a plan. Some people think it would be better if people by windows boarded first; that way, anyone in an aisle or middle seat wouldn’t have to keep standing up. Meanwhile, others believe the Southwest Airlines style of pick-any-open-seat is optimal.
These “gut feelings” about this boarding process were rendered irrelevant in an old episode of “MythBusters.” In it, the cast built a mock 173-seat aircraft and tested several boarding approaches using real people and luggage.
Relying on data cuts through emotional biases.
It’s possible to take a similar data-backed look at a common question I hear about systematic investing: Is this style of investing capable of reacting fast enough to declining markets?
Investment Update
Why We’re Willing — And Wanting — To Look Different From the Norm
In investing, the principle of non-correlation presents both opportunities and challenges.
While our portfolios may not look drastically different from traditional approaches today, there will likely come a time when they do. Non-correlation means holding investments that don’t always move in sync with the broader market. While this can feel uncomfortable, we think it’s crucial for managing risk, reducing volatility, and enhancing long-term growth potential.
This concept and willingness to look different is key. It’s like carrying an umbrella on a cloudy day, when no one else does — it may seem unnecessary at the time, but when the market storms inevitably come, you’re better prepared. Holding non-correlated assets can feel counterintuitive when traditional investments are performing well, but these same assets often provide the stability needed when market conditions shift. While looking different may be tough in the moment, it’s often the foundation for achieving a more resilient, long-term outcome.
In this month’s Investment Update, we discuss:
- The advantages we see in trend following during unpredictable markets
- How trend following steers us away from the pitfalls of market predictions
- Why a disciplined, systematic approach may reduce risk while helping keep the focus on long-term growth
But first, here’s a summary of the global asset classes utilized in our portfolios and their exposures for October.
Archive: News & Investment Updates
Let's Talk
To discuss how we can help build your financial roadmap