Positive signs of market stability have been springing up over the past two weeks and have brought Appleton Group’s core asset allocations back to a more neutral posture. We call them “Green Shoots” and are aptly named because just like in Spring, flowers pop up as buds before they eventually bloom. On balance, we’re neither overly defensive nor overly assertive, which we’re very comfortable with given ongoing uncertainty over the health of the economy.

This point is really important for all investors to understand and it’s one of the few absolutes in investing theory: The market always leads the economy. What does that mean? It means that markets themselves are a great forecasting tool for the future direction of the economy. This was true back in early March when the markets turned down well ahead of the near total shutdown of the global economy. It may also be true now as the economy is just starting to open back up.

For investors who embrace this key concept, it may help to understand why we’ve been becoming less defensive is our risk-managed strategies over the past two weeks. But it’s also important to remember that markets are still dynamic and we’re continuing to monitor key trends every day for both opportunities and risks. This discipline has helped us remain flexible, nimble, and on the right side of the market as much as possible during this most volatile moment in history.