Weekly Client Letter – May 6, 2024

Wall Street often advises staying invested, warning that missing the market’s 10 Best Days can significantly reduce your returns. As a tactical risk manager, we would argue, “Yes, but missing the 10 Worst Days increases your returns to 15.70%!”

Achieving that may be unrealistic but consider missing BOTH the 10 Worst AND the 10 Best Days – your returns are still better than if you just buy and hold. This perspective emphasizes the value of strategic risk management in your portfolios. We believe there are benefits to both investment styles and will continue monitoring portfolio risk for all market environments.

Win by Not Losing

Weekly Client Letter - May 6, 2024
Source: Bloomberg, Redwood. Data as of 4/30/2024. Date Range from 4/1/1979 – 4/30/2024.
  • 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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