Today’s Yahoo Finance Morning Brief featured an interesting point made on Tuesday by Compound Capital Advisors’ Charlie Bilello:

“The 25 stocks in the S&P 500 with the lowest returns last year are all positive to start the year, with a median return of +32%,” Bilello observed. “On the flip side, the best performing stocks from last year are underperforming with a median return of -3% to start the year.”

This reflects what we have been seeing and hearing. We have talked to a few financial advisors who achieved strong performance results last year but are struggling this year. We have also talked to a number of advisors who had poor performance results last year but are achieving commendable performance results year-to-date. The varying results may be attributable primarily to the battle between growth and value as the COVID-19 vaccine rolls out and the economy starts to reopen.

Bottom line, you can’t time the market, mostly because past performance doesn’t equal future results. But you can’t just be passive either, given the market is moving faster than ever before. Stick passively to what worked in the past, and the world will pass you by. The answer is agility. Agility is about being active enough to stay in harmony with what is going on in the market without being so passive that you will end up being obsolete. Where the market timer may try to time the growth to value shift and be 100% in either one, the agile investor would tilt towards whatever makes the most sense at the current time.


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