Yesterday’s Performance

Not to bother anyone with the daily details of Pinnacle’s portfolio performance, but on high volatility days in the market we can’t help but look at how our portfolios perform when markets are making big moves. Yesterday certainly qualified as a “big move” day as the S&P 500 Index lost -3.11%, moving the broad market average even closer to its upward sloping long-term 200-day price moving average. Since we have repeatedly written that the equity markets were trading well above their long-term averages, the recent price retracement is no surprise. However, we want to be certain that Pinnacle portfolios are performing about how we would have expected considering the higher levels of volatility coming into the market.

The results for our conservative clients were excellent as DC (Dynamic Conservative) portfolios declined -0.22% on the day and DCG (Dynamic Conservative Growth) portfolios declined -0.89%. This represents a decline of 7% and 28% respectively of the S&P 500’s return for the day. Both portfolios beat their benchmarks on the day with DC beating by +0.21% (21 basis points) and DCG beating by 71 basis points. The DMG (Dynamic Moderate Growth) and DA (Dynamic Appreciation) portfolios also had good days relative to the broad market as well as relative to their benchmarks. DMG declined by -1.6% and DA by -2.1%, which is 51% and 67% of the S&P 500 Index, respectively. Both strategies beat their benchmarks by 17 basis points for the day. Portfolio manager Rick Vollaro’s DUA (Dynamic Ultra Appreciation) strategy had the best day, beating the S&P 500 Index by 78 basis points and only capturing 75% of the stock market’s decline.

We caution our clients not to become absorbed by the daily fluctuations of their accounts. I can assure you that the Pinnacle investment team is closely watching daily, monthly, and quarterly performance to determine if our asset allocation decisions are sound. At the end of the day, excellent portfolio performance is earned over time by properly focusing on market technical behavior, market cycle analysis, and valuation metrics. Over the very short-term almost anything can happen, but that doesn’t mean we can resist taking a peek at daily performance from time to time.

Please note that portfolio performance discussed above is based on a sampling of individual client portfolios. Client returns may vary slightly from those noted due to minor differences in security weightings. Please also see Pinnacle’s performance disclaimer at the bottom of this webpage.

S&P 500 Index with 200-day moving average