Co-Founders' Monthly Note For Financial Advisors

November 2024:

Why We Don't Try to Read Political or Economic Tea Leaves

As the election season unfolds, markets can become a reflection of a broader, collective sentiment — sometimes swayed by predictions, fears, and assumptions about the future. In times like these, emotional investing is seemingly at an all-time high, with many financial advisors and clients alike feeling the pull to respond to headlines and perceived market shifts. But while the news cycle may push for reaction, our approach remains the same: disciplined, systematic trend following.

In investing, staying the course requires a willingness to let markets tell us where the real opportunities are, even when external forces attempt to predict or sway. At Blueprint Investment Partners, we aim to bypass the noise by anchoring our decisions to repeatable and reliable systems rather than attempting to read the political or economic tea leaves. It’s a steady-handed strategy, and while it may not grab headlines, we believe it’s the surest way to deliver long-term, repeatable results.

Does this mean we’ll be well-positioned for whatever happens in next week’s election? That’s unknowable until after the fact. However, we take confidence in the principle that price often predicts news. In other words, should a downside surprise in markets occur as a response to election results or any other event, systematic investing strategies that use a trend-following approach will provide predetermined exits aimed at limiting downside risk so clients can survive another day.

Alongside the election, the unprecedented rise in NVIDIA’s market cap has been the talk of the town. Therefore, in this month’s Co-Founders’ Note, we discuss:

• The potential risks of market concentration
• Why a disciplined trend-following approach has kept us positioned in NVIDIA through market shifts
• How staying committed to trends, even during periods of uncertainty, supports both growth and risk management
• Why a consistent systematic approach can provide financial advisors with a reliable framework regardless of market or political cycles

But first, here’s a summary of our take on what transpired in the markets in October.