SMI celebrated a significant anniversary last month, which got me thinking, as the celebration of such milestones often do. Here are a few brief thoughts regarding a few significant numbers related to SMI’s history and the current market situation.

  • 30: Amazingly, last month kicked off SMI’s 30th year. Much has changed since Austin published that inaugural July 1990 newsletter. But SMI’s fundamental reason for being hasn’t changed — we still want to be a trusted guide that Christians can rely on to help them navigate the investment maze. And as we travel together, we hope to incline each member’s heart toward ever-greater generosity, helping you have more so you can give more to further the cause of Christ and bring Him glory!
     
  • 20: This is my 20th year working alongside Austin at SMI, as well as the 20th year of SMI offering web memberships. The timing of our web launch seemed terrible at the time, corresponding as it did to almost the exact moment the market peaked in March 2000. But what eventually became clear to us — particularly once we started blogging regularly in 2003 — was that members rely on us much more during market downturns than during the good times. Perhaps God could see wisdom in that timing after all!
     
  • 15: In November 2003, SMI’s first Premium/Advanced strategy launched after many months of research. This was the first strategy Austin and I developed together and it’s turned out pretty well! Even after a few recent missteps, Sector Rotation’s annualized return since launch has been +13.5%, while the overall market has earned just +9.2%. That means every $1,000 invested in SR has grown to $7,281 vs. just $3,989 for the market.
     
  • 10: I’ll transition now to market-focused numbers. Earlier this year, both the current economic expansion and the bull market in stocks celebrated their 10th birthdays. That makes the expansion the longest in history, while the bull market ranks among the longest as well. This “10” number has a bittersweet element to it, however, because of the perpetual cycles that drive both the economy and financial markets. While investors have enjoyed the huge gains the markets have delivered over the past 10 years, the length of these current uptrends is a reminder that recessions always follow expansions and bear markets always follow bulls. There’s no escaping their cyclical nature.

    However, SMI hasn’t been idle during this favorable half of the cycle. In 2013, we released our first truly defensively-oriented strategy, Dynamic Asset Allocation. And last year we introduced defensive protocols to our flagship Upgrading strategy. The combination of these new tools make us confident that SMI member portfolios are better prepared to weather an oncoming bear market than ever before.
     
  • 5: The next five years seem likely to be a transitional period along the lines of 2000-2002 or 2007-2009. The question is less whether change will come during the next five years, but what type and how severe will the change be? In hindsight, while the depth of the bull markets referenced above were similar, 2000-2002 was a more “routine” bear than 2007-2009, which revealed significant problems in the financial markets and led to dramatic changes (such as the Central Bank takeover of the markets) in its aftermath. Will the massive global debt buildup of the past decade come to a head as an emerging crisis, or will it be kicked down the road to be dealt with later? Whatever the answer, we’ll be here to help interpret and navigate whatever the markets throw at us.
     
  • 1: The most important number — one — is you! We’re committed to helping you get whatever degree of assistance you need to succeed financially. For many, that’s “do-it-yourself — with help” through this newsletter, with the relationship looking much as it has for the past 30 years. Many have already built on that by adding a deeper level of personal financial planning via the MoneyGuide Pro® software that has been available to Premium SMI members in recent years. And a growing number (nearly 400 households already!) have decided to outsource their investing to the Private Client team at SMI Advisory Services, enjoying a new level of personal service.

It’s been a great joy spending the past 20 years helping to build out the array of choices now available to SMI members. Whatever level of engagement you decide is best for your current situation, we appreciate your choosing us to walk alongside you on your financial journey!