How does your approach to dynamic asset allocation differ from a traditional buy-and-hold strategy?
I get this question constantly from prospective clients, especially after a rough quarter in the markets, so I want to walk you through how I think about it.
The short version is that buy-and-hold and dynamic asset allocation are different approaches, and periods like 2008, 2020, and 2022 help illustrate where those differences matter. I wrote about this in real time during the April 2025 market selloff. Read it here if you want additional context on how I was thinking about risk at the time.
Buy-and-hold can be a reasonable long-term strategy for some investors, but periods like 2008, 2020, and 2022 show that static allocations can still go through sharp drawdowns. In 2008, the S&P 500 dropped roughly 57% from peak to trough1. In early 2020, markets fell more than 30% in a matter of weeks2. In 2022, both stocks and bonds declined together, which challenged the way many investors think about diversification in a traditional balanced portfolio3.
Those types of drawdowns can be especially difficult for investors who are relying on their portfolio for near-term goals, retirement income, or business-related liquidity needs.
My approach is centered on responding to what the market is actually doing rather than assuming it will recover on a specific schedule. As a Chartered Market Technician®, I use price trends, momentum, and other technical indicators as part of the process. When the weight of the evidence changes, portfolio positioning may change as well. The goal is not to predict every move or eliminate downside. It is to apply a disciplined framework that can adapt as market conditions evolve.
About Author
Todd Stankiewicz | President & Chief Investment Officer, SYKON Capital
Todd Stankiewicz is the Chief Investment Officer of SYKON Capital, a fee-based registered investment advisor with offices in Westchester County, NY and Jupiter, FL. He is a recurring guest on Fox Business and the Schwab Network, where he discusses markets, portfolio strategy, and investor behavior. Learn more at www.sykoncapital.com
Sources:
1 Federal Reserve History, “The Great Recession,” noting the S&P 500 fell 57% from its October 2007 peak to its trough in March 2009.
2 Market recap data for the S&P 500 decline from February 19 to March 23, 2020. 3 Callan analysis of simultaneous stock and bond declines in 2022.
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Advisory Services offered through SYKON Capital LLC, a Registered Investment Adviser with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor. The information contained in this presentation has been compiled from third party sources and is believed to be reliable as of the date of this report. Sources are provided for informational purposes only. The author or firm may have a financial interest in the topics discussed. Past performance is not indicative of future returns and diversification neither assures a profit nor guarantees against loss in a declining market. Investments involve risk and are not guaranteed.