Weekly Client Letter – June 3, 2024

Buying and holding can lead to significant emotional & investment pain for investors. Market downturns can be a prolonged and painful experience, further intensified when considering inflation.

Historically, there have been significant periods known as “lost decades” like 1929, 1968, or 1999 where $1,000 would have shrunk to less than $400 throughout the decade. And the path to recovery could take even longer, prolonging the painful experience. These periods of dramatic underperformance highlight the potential risks associated with a solely passive investment strategy.

This is exactly why we incorporate active risk management to avoid such pitfalls. Your trust in our strategy allows us to navigate these complexities, aiming for a smoother financial journey.

Buy & Hold’s Lost Decades

Weekly Client Letter - June 3, 2024
Source: Bloomberg, U.S. Bureau of Labor Statistics (BLS), Redwood. Data as of 5/29/2024. Date Range from 12/31/1927 – 4/30/24.
  • We believe the preservation of capital is key to consistent, long-term investment success.
  • Our investment approach is grounded in economic theory and backed by quantitative analysis.
  • Managing drawdown risk is a pillar from which we build our portfolios.

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