WealthProtect Status Update: December 2014

We email the status of our WealthProtect System* monthly and give probability (Low, Mid, High) of a change in status within the next two months. We also include a commentary on actions taken this month as well as changes in overall asset allocation.

Commentary

WealthProtect triggered this month. We triggered out of Emerging Foreign Equities. This means that our portfolios have approximately 50% fewer equities than when fully invested. This may seem odd as the US market continues to make new highs. Maybe the US is the only game in town and maybe it is different this time. However, when US large company stocks and Real Estate Investment Trusts (REIT's) are doing well, when bond yields are plumbing new lows, when the yield curve is flattening, and when riskier bonds have dropped significantly, we must be open to the possibility that something is brewing. As a reminder, the 2008 crash was 57% from peak to trough, the 1929 crash was 89%, and the Japanese stock market is still down 55% from its peak set in 1989! (Yahoo Finance) I have no clue whether we will have a crash, a modest correction, or a return of the bull run. Our WealthProtect System is non-emotional and it is telling us that at least outside of pure US equities, something is amiss. Stay tuned. Have a blessed Christmas!

Thanks for your trust.

*The Armstrong Wealth Management Group WealthProtect System is an investment risk control system designed (but not guaranteed) to limit significant losses in major bear markets (excess of 30% loss from market peak to market trough). It is NOT designed to prevent normal market losses (under 20%). No strategy can assure a profit or protect from a loss. Occasional false signals can reduce returns.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Stock investing involves risk including loss of principal.

International and emerging market investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

Investing is Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.

The fast price swings in commodities will result in significant volatility in an investor's holdings.

All performance referenced is historical and is no guarantee of future results.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

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