We human beings are a funky bunch. We are often influenced by many biases that cloud our judgment without us even knowing it. For instance, we often suffer from Confirmation Bias, which is the tendency for us to only gather information that supports our original decision-making.

For example, if an investor is largely in cash “because the market is in a bubble”, they may only read or observe information that supports such an interpretation rather than objectively looking at all the available information. Rather than studying price and looking at the big picture, they might only read articles or watch financial news highlighting the negatives: inflation, higher rates, hard landings, regional banking crises, and debt ceilings. These are all very real conditions to consider, but they are not the only conditions to consider.

If we only focus on information supporting our original decision-making, it can have negative consequences on investment outcomes. These natural human biases are exactly why our Adaptiv™ process does not use financial news or “expert” opinions for portfolio construction or investment decisions. Rather, it uses the very objective study of the law of supply and demand. More supply than demand, price falls. With more demand than supply, price rises.

By studying the interaction of supply and demand, we can have objective observations that challenge assumptions. As an example, this objective process helps our clients avoid blindly owning long-term Treasury Bonds in a rising rate environment just because a 60/40 portfolio has been trumpeted by experts for the past 40 years. This is just one example with many more we will be highlighting during our April Education Series.

Client First answers the following important questions using the Adaptiv™ process:

• Are we in a market bubble?
• Has the market gone too far, too fast?
• What happened to the recession?
• What happened to inflation?
• Will the Presidential Election derail this market?
• What is the difference between a market correction and a bear market?
• What important sectors and asset classes should we be paying attention to?

This Presentation is part of our FREE Education Series. View more >

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This presentation is for informational and educational purposes only and should not be used to make investment decisions. All images are for illustrative purposes only. Full disclaimers, disclosures, and terms of use can be found here. Clients of Client First Investment Management, LLC may maintain positions in the securities discussed in this presentation. Client First Investment Management, LLC is a SEC registered investment advisor.