Video Transcript:
Hi, Jeff Thomas here with a quick market update.
After a volatile week, the S&P 500 has declined over 12% from peak to trough so far this year. Sell-offs related to SARS and ZIKA in past years averaged 13%. So this sell-off is consistent with history so far.
One of our principles at Archetype is "Evidence Not Opinion".
While we don't know how the coronavirus will play out, we do have a consistent game plan for dealing with all kinds of market environments.
Our investment philosophy is called "The Three Dials".
The first dial is Valuation. This dial has been in the "off" position for some time. So, going in to this correction, we have only been taking 2/3 "risk on". This indicator is not close to reversing up at this time.
The second dial is our Economic indicator. Interestingly, with all the bad news bombarding us from the media, this dial remains surprisingly strong. Leading economic indicators actual improved in January and early February numbers look solid. This indicator is not at risk of turning down for the time being.
The third dial is our Technical indicator. There has been technical damage to the charts. Our next investment committee meeting is Monday evening. If the market does not rally significantly on Monday, we are likely to lighten up on equities slightly next week.
Rest assured, we have our hand firmly on the wheel. We will be back with another update next week.
Thanks for your trust.