Market Update: May 12, 2022 Rebalancing Day

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

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Transcript:

Tom Vaughan:

Hello, everybody, welcome to Thursday.

The S&P 500 was down point one 3%. Today actually had a nice rally up at the end of the day.

The NASDAQ actually went all the way into the positive at the end of the day. So a little bit of a bounce off the bottom from this morning.

Today was the day that we did some rebalancing, we use a couple of different measures to figure out when to rebalance. Number one is what’s called the VIX, index vi X. And that shows how many people are, you know, doing puts versus calls. So when the number gets above 30, which is the number that oftentimes is a good time to buy stocks, that means there’s more people buying puts, which means there’s more people thinking in the market is going to go down.

So you look for those extremes when everybody thinks the market is gonna go down. And oftentimes, the market will kind of rally from there, because again, those people have all made their moves, it leaves the buyers behind. And then the other thing I look for is kind of what I call that stretch, I talked about that rubber band, when something stretches way below the average really quickly, are way above, you know, oftentimes it snaps back. And there’s a measure called a Wilder’s RSI index. It’s basically relative strength index. And when that gets below 30, that means that the stretch to the downside is pretty high. And it’s usually again, a good time to buy.

And so the rebalancing that we do, I wait for both of those in this particular case. And so that came out this morning. And we went ahead and did that, again, this is on the IRAs at this point, just because we want to be careful with the taxes, we will continue to work with the non IRAs on a custom basis depending on situations, what taxes somebody has, and those types of things. So the idea behind rebalancing is that, you know, especially in a down market like this, if you bought you know, at a higher level, then you rebalance, you buy some more down here and you rebalance, you buy some more down here, what you’re doing is you’re lowering your average cost for that particular holding. And then when that market does turn around, you get back to profitability faster. So it’s, it’s better than just sitting there with that original price, you kind of just keep rebalancing, and then get a faster recovery. So at this point in time, we’re working for faster recovery.

You know, if we see more indications of recession, we’ll work on getting more conservative with the overall allocation. But so far, I don’t have those signals that I’m watching in place to make me convinced that, you know, we’re recession is imminent, the economy is pretty hot. And so there’s a chance that all of these different things that are pushing down on it aren’t enough to push us into recession. So we need to keep watching and see what happens. Lots of variables going on with China, Ukraine, the Federal Reserve, you know, all these things that are going on, of course, but I look forward to seeing it tomorrow, I do my summary on my talk money with Tom show on YouTube. You can join me and watch and see what I have to say about the summary for the week at 1215 to one o’clock, and maybe have some questions, lots of things going on right now. You can input those questions to the email, or what have you. It’s anonymous, and we can just answer those, you know, for for everybody because if you have a question, somebody else might also so anyway, if you get a chance, love to see you on the show. And otherwise, I’ll talk to you then thank you very much.

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.