Co-Founders' Monthly Note For Financial Advisors

October 2024:

Why We’re Willing — And Wanting — To Look Different From the Norm

In investing, the principle of non-correlation presents both opportunities and challenges. 

While our portfolios may not look drastically different from traditional approaches today, there will likely come a time when they do. Non-correlation means holding investments that don’t always move in sync with the broader market. While this can feel uncomfortable, we think it’s crucial for managing risk, reducing volatility, and enhancing long-term growth potential.

This concept and willingness to look different is key. It’s like carrying an umbrella on a cloudy day, when no one else does — it may seem unnecessary at the time, but when the market storms inevitably come, you’re better prepared. Holding non-correlated assets can feel counterintuitive when traditional investments are performing well, but these same assets often provide the stability needed when market conditions shift. While looking different may be tough in the moment, it’s often the foundation for achieving a more resilient, long-term outcome.

In this month’s Co-Founders’ Note, we discuss:

• The advantages we see in trend following during unpredictable markets
• How trend following steers us away from the pitfalls of market predictions
• Why a disciplined, systematic approach may reduce risk while helping keep the focus on long-term growth

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