Worry less | Enjoy more
We invite you to call us to discuss how this data informs our strategy and how a ZENdex Portfolio could be a powerful addition to your overall investment mix. We weigh the data below heavily when developing our portfolio strategy, in which we aim to maximize the relationship between performance and protection while minimizing taxation.
ULTRA-CONSERVATIVE | BOND REPLACEMENT | GROWTH | MANAGED OPTIONS
S&P 500 RELATIVE TO ITS ALL-TIME HIGH
It’s better to buy low. That’s why we monitor the S&P 500 to see how far it is below its all-time high.
Historically, the further the S&P 500 has fallen from its all-time highs, the more attractive it has become for long-term equity investors.
Stock market declines can represent meaningful opportunities for a ZENdex portfolio.
If you feel like such opportunities often go uncaptured, let us help you capture the economic value inherent in volatility.
S&P 500 RELATIVE TO ITS MOVING AVERAGES
The S&P 500 is above its daily, weekly and monthly averages1. Notably, it has been more than two standard deviations above its monthly moving average for more than 13 consecutive months – a condition that, in the context of history, is rare.
A ZENdex portfolio may help better position you in the likely event that the market returns to its average.
TREASURY YIELD CURVE VS CONSUMER PRICE INDEX
Risk-free rates of return2 are much lower than the rate of inflation.3 The real rate of return is therefore negative across the entire yield curve. This renders fixed income unattractive as an asset class in our view for money that is seeking a return.
A ZENdex portfolio can address the prevailing problems associated with fixed income.
THE PHILLIPS CURVE
The Federal Reserve has overshot its target for inflation,4 yet the economy has not returned to full employment.5
Because persistently elevated inflation can compress the price-to-earnings ratio of the stock market,6 persistent inflation could likely result in a market decline.
A ZENdex portfolio may better position you for this.
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To find out more about how Thomas Financial can help position your portfolio to take advantage of market volatility, please email email@example.com or call us at (813) 273-9416.
- Source: thinkorswim desktop trading platform.
- Source: https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield
- The measure of inflation is the year-over-year change in the Consumer Price Index (CPI).Source: inflationdata.com
- We are displaying inflation as measured by the Consumer Price Index (CPI). It’s worth noting, however, that the Federal Reserve states its goal for inflation in terms of the Personal Consumption Expenditures (PCE), which is highly correlated to CPI but can generate different readings. The PCE can be found here: https://www.bloomberg.com/markets/economic-calendar. For more information on how CPI and PCE differ, you can go to: https://www.clevelandfed.org/newsroom-and-events/publications/economic-trends/2014-economic-trends/et-20140417-pce-and-cpi-inflation-whats-the-difference.aspx
- https://fred.stlouisfed.org/series/UNRATE. For our purposes, we are considering full employment to have been when the unemployment rate was at 3.5% just prior to the pandemic. Because the Federal Reserve considers many variables in arriving at what it ultimately deems to be “full employment”, the unemployment rate that represents full employment can, itself, be a moving target.