December 2020 | Portfolio Update

Dear Spartan Client,

During this season of gratitude and thanksgiving, we wanted to sincerely thank each of you for what you mean to us, personally and professionally. This holiday season promises to be unlike most, perhaps different than any other we have experienced. We hope it is a joyful, restful season for you and your family.

Below are the asset classes utilized in our portfolios and their model-driven exposure heading into December.

At a Glance: Allocation Adjustments heading into December, 2020

  • U.S. Equities: Decreasing slightly from last month. Our portfolios will return to their baseline allocation, as there are uptrends across the intermediate and long term, but exposure previously transferred from real estate will be returned.

  • International Equities: No change to exposure, which is at its baseline allocation, with uptrends remaining across both timeframes.

  • Real Estate: Increasing to baseline exposure. For the first time since the beginning stages of the pandemic, allocations will increase due to uptrends in both timeframes.

  • Intermediate-Term Fixed Income: No change to exposure. The intermediate-term downtrend and long-term uptrend in U.S. Treasuries remains intact. International bonds are also unchanged to hold the exposure passed off from the U.S. Treasuries.

  • Inflation-Protected Bonds: No change to exposure, which is at its baseline allocation, with uptrends remaining across both timeframes.

  • Short-Term Fixed Income: Depending on the portfolio, exposure will either decrease or remain the same as exposure is returned to real estate.

  • Alternatives: Decreasing due to an emerging downtrend in gold. The long-term uptrend remains intact.

Asset Level Overview

Equities and Real Estate

Despite a tight U.S. election and new highs in COVID-19 infection rates across the country, global equity markets staged a furious rally, increasing near or above double digits across most equity indices. Positive vaccine and treatment news drove a rotation away from growth stocks, which had benefited throughout the pandemic, in favor of value equities, which have mostly suffered. The result was a broadening out of the current bull market, propelling the major indexes in the U.S. to new highs and the Dow above 30,000 for the first time. Real estate-related stocks ended November with both short and long term uptrends for the first time since Q1 of 2020. The result is a return to baseline allocations across all equity and real estate asset classes in our portfolios.

Fixed Income and Alternatives

U.S. Treasury bonds and notes generally reflected the risk-on trade in November, declining slightly throughout the month. In contrast, inflation-protected and international bonds both increased. On the alternative front, gold suffered from the rotation toward risk, as prices fell enough to create an intermediate-term downtrend as we enter December. The result will be a slight decrease to fixed income and alternative allocations.

Three potential macro catalysts for the recent trend changes:

  • Positive Vaccine News: Significant announcements by Pfizer, AstraZeneca, and Moderna show promising data even as the effects of the pandemic worsened.

  • Continuation of Market Rotation: In November, small- and mid-cap stocks outperformed their large- and mega-cap counterparts. Additionally, value indexes outperformed growth indexes, though they continue to lag significantly year-to-date.

  • Mixed U.S. Economic Data: Weekly jobless claims rose while continuing unemployment claims continued to decline. Retail sales in October also missed expectations and grew at the slowest pace since April. Housing remained the economic standout, as sales and housing starts both hit all-time highs, exceeding pre-financial crisis levels.

Finding Clarity Amidst Complexity

Our world is growing more and more complex, and with growing amounts of data at our fingertips, each decision can become increasingly difficult trying to reconcile all the data points into a single point. In our process, one data point has shown itself as a powerful aggregation of many factors present in the marketplace, price. In our view, the most important factors are those that increase the likelihood that you achieve your goals and stick with the plan. In that respect, price checks all the boxes for us. Regardless of the asset class or factor, the price trend of the asset tells us more than any other data point or fundamental input. In our estimation, by using the price trend of the asset to determine exposure and risk, we run the highest probability of success in helping you meet your goals.

Perhaps the most interesting aspect of using price is when the trend of an asset class is in direct conflict with the prevailing fundamental view and/or news cycle. Look no further than this election cycle as the perfect example of price conflicting with the zeitgeist. In nearly every corner, the prevailing view coming into November regarding the market’s direction and interpretation of election results was that a Biden win, especially if contested, posed the most risk for markets.

Yet, nearly every equity index has increased dramatically since election day, and the price trend in U.S. equities remained in a rising state throughout. Through our lens, the key takeaway is this: remaining adaptable to what is happening is a more precise and risk-focused approach than anticipating the market reaction to complex events.

Thank you for allowing us to serve you.


David Childs, Ira Ross, Blaise Stevens, and Eric Warren

Spartan Planning

Disclaimer: this note is for general update purposes related to the strategy and approach of Spartan Planning portfolios. Every client's situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your particular exposure to any given asset class will depend on your goals, risk profile, and how tactical or passive your risk profile calls for. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth please contact your advisor. This email and the data herein is not a solicitation to invest in any investment product nor is it intended to provide investment advice. It is intended for information purposes only and should be used by investment professionals and investors who are knowledgeable of the risks involved. No representation is made that any investment will or is likely to achieve results comparable to those shown or will make any profit at all or will be able to avoid incurring substantial losses. While every effort has been made to provide data from sources considered to be reliable, no guarantee of accuracy is given. Historical data are presented for informational purposes only. Investment programs described herein contain significant risks. A secondary market may not exist or develop for some investments portrayed. Past performance is not indicative of future performance. Investment decisions should be made based on the investors specific financial needs and objectives, goals, time horizon, tax liability, risk tolerance and other relevant factors. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Investors should consider the underlying funds’ investment objectives, risks, charges and expenses carefully before investing. The Advisor’s ADV, which contains this and other important information, should be read carefully before investing. ETFs trade like stocks and may trade for less than their net asset value. Spartan Planning Group, LLC (“Spartan” or the “Advisor”) is registered as an investment adviser with the United States Securities and Exchange Commission (SEC). Registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the Adviser has attained a particular level of skill or ability. Indexes are unmanaged and do not incur management fees, costs, and expenses. Spartan’s risk-management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk or the ability to control risk. There are risks associated with any investment approach, and Spartan strategies have their own set of risks to be aware of. First, there are the risks associated with the long-term strategic holdings for each of the strategies. The more aggressive the Spartan strategy selected, the more likely the strategy will contain larger weights in riskier asset classes, such as equities. Second, there are distinct risks associated with Spartan Strategies’ shorter-term tactical allocations, which can result in more concentration towards a certain asset class or classes. This introduces the risk that Spartan could be on the wrong side of a tactical overweight, thus resulting in a drag on overall performance or loss of principal. International investments may involve additional risks, which could include differences in financial accounting standards, currency fluctuations, political instability, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks. Diversification strategies do not ensure a profit and do not protect against losses in declining markets



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