The Mainsail Equity Model is down 8% from its recent high. While the market was due for a 10% peak-to-trough correction, the S&P 500 index is currently down almost 6% from its recent high. A focused allocation, intentionally limiting the dilution of returns from over-diversification, will also limit the dilution of pullbacks. While there is safety in diversification, safety is not congruent with our growth strategy. What shields us from downturns also shields us from growth. The Mainsail Model doesn’t seek a shield from market movement. It stands confidently optimistic in its growth strategy and buys the dip.

The market’s reaction to the first quarter of any new presidency is historically volatile. Outside of a presidential cycle, the second half of February also historically brings consistent buying opportunities. Buying is what we did. We stuck to the plan. Downturns aren’t fun for any investor, but experiencing them and breathing through them makes you a strong, experienced, and seasoned investor. Two weeks ago, I wrote about creating something positive in your life. I recommended using the last two weeks to focus on a positive eating habit and a fitness plan. I hope you did, and I hope you are enjoying the benefits of focusing on your health. I hope you’ve been reminded that you can create positive outcomes for yourself, regardless of what else is happening around you.  

Market pullbacks can trigger feelings of doubt and uncertainty among some investors, so it’s an opportune time to remind you that Mainsail is primarily allocated to U.S. equities. The health of the consumer upholds the U.S. consumer economy. Reports show that U.S. household disposable income growth has outpaced household credit card debt for the last two years. The average U.S. consumer’s credit score is at a 15-year high today. Today, 40% fewer consumers are in collections than pre-pandemic levels. The average corporate balance sheet also reflects a healthy financial picture. Inflation remains relatively stable, and unemployment numbers are consistently low.

Go into town this Friday evening and take a look around. You’ll see restaurants full, shops full, parking lots full of new cars, and a bustling crowd of happy consumers stepping out on dates in their best new outfits for an evening of spending money from their comfortable budgets.

This picture doesn’t apply to everyone. I see the struggles some of us face. However, it applies to enough of us for growth investors to remain overweight in US equities and remain optimistic.