Learn about the strategies that can protect investors, and are also driving TAM’s 107.7% growth over the last year
When the market fell in March of 2020, the S&P 500 lost nearly 34% of its value, but Tucker clients had protections in place to combat this decline. Tucker’s Advisors Services Analyst Chris Wharton and Lloyd Domingos, Senior Director of Operations for Tucker’s asset management division, talk about strategies that can defend clients against this type of volatility.
This presentation was given at the Tucker Super Conference XVI in January of 2021 and is only for financial professional use. Insurance-only agents are not licensed to offer investment advice.
Video Synopsis: Why TAM’s Portfolios Are Outperforming
On Feb. 19, 2020, the S&P 500 reached 3,386.15, its highest historical value at the time. By March 23, it had rapidly dropped to 2,237.40, a decrease of almost 34%.
The S&P 500 didn’t reach a full recovery from this decline until Aug. 21, 2020, when it climbed back to February’s previous record of 3,386.15. It was a scary flashback to 2008, even if the market stresses would prove to be much shorter-lived.
Of course, even during the recovery, many investors remained justifiably worried that the financial policies contributing to this drop could enable it to happen again. Almost unabated, the pandemic that sourced this volatility was marching onward. These circumstances revealed the importance of the algorithmic data and safe-money strategies that Tucker has always believed in following. And this tactical strategy provided a much-needed safety net.
Compared to the near 34% drop of the S&P 500, for instance, the “Growth Shield” drawdown sell trigger that Tucker had in place softened the blow for investors: an 18.5% drop for those in the “Growth: category; a 13% drop for those in the “Moderate” plan; and a mere 7% loss for those in the “Conservative” category. Tucker’s “Right Trend Equal Weight” models performed even better: a 9.5% dip for “Growth” investors; 6.5% for those in the “Moderate” category; and 4% for those in the “Conservative” plan. Finally, the “Right Trend Market Cap Weight” performed best of all: an 8.5% loss for “Growth”; 6% for “Moderate”; and 3.5% for “Conservative.
From the bottom point of the market decline in March to the current recovery (as of January 2021), there has been a 69.84% gain. Because of the tactical strategies Tucker had in place, its clients participated at some level in 80% of the market recovery. The tactical model outperformed the S&P 500 Total Return with Dividends, even with a net-of-fees return. It literally enabled investors to “sell high and buy low.”
To summarize, all investors rightly expect growth. But growth should never come at the expense of safety. Since we cannot predict markets or external events like pandemics, make sure your assets under management have effective protections in place at all times.