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The Markets Monthly Review (Through 10/31/19)

Investors continued to buy stocks, pushing values higher in October. Each of the benchmark indexes listed here posted solid monthly gains despite signs that the economy is slowing, both domestically and globally. Businesses remain hesitant to invest in nonresidential structures, equipment, and software, exports are lagging in volume, and prices remain subdued. Manufacturing continues to wane, and residential sales have been erratic at best. However, there may be headway in the negotiations between the United States and China, as the two economic giants try to resolve their ongoing trade war (although rhetoric from either side changes almost daily). The labor market continues to add new jobs, although wage inflation was muted last month. Since the beginning of the year, interest rates have been reduced by 75 basis points to their lowest levels since May 2018. The last day of the month saw the House of Representatives pass a resolution establishing a framework for a new phase of the impeachment inquiry.

did you know?

The #1 household economic concern among affluent investors with $1 million or more in investable assets? Protecting their current levels of wealth, according to Phoenix Marketing International and Cerulli Associates. According to their recent survey, investors’ top five household economic concerns include:

1.  Protecting current level of wealth (17.2%)
2.  Health of myself or family member (11.4%)
3.  Planning for retirement (11.1%)
4.  Cost of healthcare (8.5%)
5.  Rate of return in the stock market (7.6%)

bright ideas
3 Steps to Managing Client Expectations in an Aging Bull Market

1. Identify the underlying concerns driving investment needs.

Emotions can cause an investor to act against their best interests and underlying concerns, forgetting what truly matters most to them. According to a recent study¹, investors are more than twice as likely to prefer having predictable protection over potential gains.

When markets are soaring, you may need to educate and remind these clients that the reason they are not achieving S&P 500 returns is because their primary goal of their investment strategy is to protect.

For example, Beacon Capital Management’s Vantage portfolios provide a mechanical stop-loss protection measure to pull back from equities in times of extreme market volatility. In mid-December 2018, we had rotated out of equities and protected clients from the additional losses seen by December 24. By going into fixed income, we avoided the decline and missed the rapid rebound in early 2019. However, our goal is not to time the market and hit home runs, but rather to remove catastrophic losses. By doing so, our short-term gains don’t have to be as big to deliver consistent long-term results.

2. (Re)evaluate your clients’ equity exposure.

Each sleeve in your client’s assets should be positioned for a particular purpose, and these needs can evolve over time. It is important to maintain open communication to understand those needs to maintain alignment in their investments.

For example, if a portion of the assets will be used to fund retirement income, consistency and defensive strategy will likely be the priority. There may also be room to include a smaller “opportunity bucket” within their plan to pursue chances for higher gains if chasing performance continues to be a desire or focus.

3. Rather than defend – describe. 

Regularly revisit the rationale for having a defensive strategy within a client’s investment lineup. Being proactive now beats being reactive when they are looking at their quarterly statements or discussing returns with their friends on a golf course.

Frankly, defensive strategies like Beacon’s have lagged over the last 1, 3, 5 and 10-year periods. Formerly top-performing strategies have dropped in ranking as the 2008-2009 period has rolled off, so these measures no longer factor in bear market performance. This is a critical and often overlooked consideration that needs to be pointed out to most clients!

And while no one can control the stock market, we can control client satisfaction. Investment performance ranks well below your reputation, relationships, service and advice as the reason for client satisfaction¹:

Client Satisfaction

Need a defensive strategy?
Contact your Beacon wholesaler to learn more about our investment philosophy today!


¹ Sources: Phoenix Marketing International, Cerulli Associates 

beacon news

Beacon Capital Management has recently been named to the’s 2019 Thrive List of Fastest-Growing Advisors. Thank you to all our advisors who have made our continued growth possible.

Be sure to visit Beacon’s News & Press page for the latest credibility pieces to share with your clients and prospects, and follow Beacon on LinkedIn for the latest updates as they happen.


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For Advisor Use Only, Not to Be Used With Clients

The GIPS Compliant Presentations for our Vantage portfolios can be obtained by clicking on the below link.  If you would like the Compliant Presentations to be emailed directly via PDF file or if you would like to receive a copy of Beacon’s Composite Descriptions; please respond to this email or contact Beacon at 937-439-9093.

BCM 2017 Compliant Presentations

Beacon Capital Management, Inc. is a registered investment adviser with the Securities and Exchange Commission. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance is not indicative of future performance.

Additional information about Beacon Capital Management is also available on the SEC’s website at under CRD number 120641. Beacon Capital Management only transacts business in states where it is properly registered, notice filed, or excluded or exempted from registration or notice filing requirements.

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Beacon Capital Management

7777 Washington Village Drive, Suite 280, Dayton, OH 45459

P: 866.439.9093 | F: 937.424.4825