One of the most important things in any investor’s portfolio is its uncorrelated performance. What I mean by that is your portfolio should not only be doing good when the economy is doing good. Essentially, you want it to be doing good when the economy is doing bad and when the economy is doing good. The only way for that to happen is to make sure that you are diversified in a multitude of different assets. In this video, I want to go over a very particular investment that has allowed the perfect uncorrelated opportunity that I have instilled in my portfolio. But enough rambling, let’s see how it did.
Welcome back! My name is Matt Jimenez. I am an entrepreneur who has worked with the greatest minds in finance over the last several years, and I’m here to point out to you guys everything important to me. The importance of this video is going over uncorrelated assets. The reason being is that I believe moving forward into 2025 and 2026, after the new election that’s occurring, and given how poor our monetary and fiscal policies have been over the decades, I believe there is going to be a massive reform in our economy. What I mean by that is I believe there is a recession that is bound to happen within the next year or two.
Why is that important? Well, Hillary Clinton said it best—not that I’m a fan of her—but she said this: “Never waste a good crisis.” We all know the philosophy of “buy when there’s blood in the streets.” So, with that being said, in all the mayhem that is happening in our economy today, you want to make sure that you have the ability to mitigate the risk of being exposed to the economy’s performance. The only way to do this is through uncorrelated assets.
While I believe that coming in the near future there is going to be a massive recession, there is also going to be massive opportunity—not only to buy up tons of assets that you want to get your hands on that are way too overpriced today, but also the ability to allow your portfolio to continue to perform in an automated fashion using algorithmic trading software. In this video, I’m going to show you the exact data of what has happened during massive market pullbacks in the S&P, which we all know today is a uniform measurement of how the American economy is doing. While it may or may not be accurate, that’s irrelevant. What we’re looking at here is just the data of what happens and how you can find performance regardless of what the S&P is doing. I bring the S&P up because it is the most common asset that people end up holding in their portfolios.
Without further ado, let’s check the charts.
Here we are. This is the S&P 500, and what I’ve done is I’ve just hovered my cursor right above July 2023. What I’m going to do is use the measure tool that they have on TradingView. I’m just going to measure how great of a decline there was during this time—from July essentially all the way to the beginning of November, late October. The reason being is that I want to actually compare what this software did during this time. Let’s see how much of a decline this is. From July 26, 2023, all the way down to October 27, 2023, that was a 10.82% decline in your portfolio considering you’re holding the S&P 500 as one of your assets.
Next, I’d like to actually see how long it took for us to recover that back considering you were holding the S&P 500. Surprisingly, we actually made that recovery quite fast considering how long of a drawn-out process that was on the way down. We recovered that back in just about two months, so from the end of October to the end of December we actually ended up recouping all those gains. Typically, that’s not common in the stock market right now. It is common with all the stimulus happening to keep the stock market afloat to make the economy seem like it’s doing well and ensue more investment.
Typically, back in the day, the stock market used to reflect the American economy’s performance as a whole. But in today’s age, they’re completely decoupled, and this is something I’ve spoken about quite often. If I were to go back through history and show you guys, typically a recovery out of a real recession would take a decade or more to recoup, and that is with the malpractice of stimulus pumping to artificially pump up the stock market to make the economy look like it’s doing good. But anyways, now let’s compare this 11% crash to how the software did.
Here is the software’s performance back in 2023. If you look at the month that the stock market started to sell off, we actually did a 19% gain for the month of July. This shows the true power of having an uncorrelated asset in your portfolio. Meanwhile, the stock market is dumping, and your portfolio is still being active.
Please visit Why You Need Uncorrelated Assets to watch the full video on YouTube!
