Appleton Group’s risk-managed and hybrid strategies continue to maintain strong defensive positions. The inherent flexibility in these strategies has enabled us to significantly reduce our exposure to growth assets in favor of money market assets (stable value), and short-term bond positions. Our response to the rapidly deteriorating market conditions has helped to soften (but not eliminate) further downside participation.

Global markets have failed to stabilize in response to central banks’ efforts to reduce interest rates and inject additional liquidity. But with interest rates already at or near all-time lows (and some countries already printing negative interest rates) this policy effort is likely to have little to no effect.

The speed at which this new bear market has appeared has set all-time records, with less than three weeks from peak to -20% or more for the major market averages. And the deterioration has been a global phenomenon – it’s safe to say that no major international markets have been immune from market weakness.

We will continue to closely monitor market conditions for continued weakness and reduce risk further should market deterioration continue.