Thursday, May 5th 2022

Worst start for stocks since 1939

Commentary

Here’s what’s happening:

  • All major stock indices — including the Dow, S&P 500, Nasdaq, and Russell 2000 — traded down more than 3% in today’s trading session, marking the worst day for stocks in 2022.
  • On Wednesday, the Federal Reserve raised its benchmark interest rate by 0.50%, the largest increase since 2000, as part of its continued efforts to slow inflation.
  • The S&P 500 is off to its worst start to a year since 1939, and April was the worst month for the Nasdaq since November 2008.

Titan's TLDR view:

Trying to find a bottom in any market is fruitless – nobody knows when, how, or why this sell-off will end. But it will end. We believe there are pockets of opportunity in the market for long-term investors, and our recent portfolio changes reflect this view. However, this kind of environment does not appear to be signaling that this is a time to go “all-in,” but rather continue playing “light offense.”

What it means for you:

  • As a Titan client, you are likely seeing losses in each portfolio and have been for some time. We’re invested in Titan’s strategies too, but we know that acknowledging the long-term nature of these investments does not soothe the pain.
  • We’ve been preparing for these conditions and believe our portfolios are well-balanced, with downside protection, and flexible enough to take advantage of the dislocations in the market.
  • Our defensive positioning allows us to play light offense – slowly increasing exposure to stocks we believe are on sale on big down days like this.
  • Our hedges are fully activated across each equity portfolio, and continue to maintain sizable cash positions further reducing net exposure.
  • As a long-term investor, you have time on your side. It can be easy for people to say they have a long-term horizon as investments go up, but we know it’s even more crucial to maintain this view when markets are trending lower.

Some further thoughts from your investment team:

“While market turbulence—like turbulence in flight—can be psychologically difficult to endure, it is not until after we land safely that we realize it was just a temporary nuisance. As your “pilots,” we aim to navigate through these market fluctuations and to provide a safe and enjoyable flight on your long-haul investing journey.”Christopher Seifel, Investment Analyst

“Markets are moving faster than ever. This can mean bigger dips, larger intraday moves, and hopefully shorter periods like this. The uncertainty of the current environment is an even greater reason to remain focused on what we do know: bottom-up fundamental analysis and risk management to get us there more smoothly.”Emily Cherkassky, Research and Analytics Associate

Any pressing questions?

We’re here. Pose your questions using the Ask Titan Anything feature in-app or email research@titan.com, and a member of your investment team will respond directly.

Onward, Your investment team at Titan

Back to Research ↗

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