TL;DR - Too Long Didn't Read
-Recap about what Round does
-Our market outlook
-Why you should invest now
This week we want to take a step back and explain our investment process at Round, what our outlook is, and why we think now is the time to add money to your account.
What Round Does
Simply put, Round is your active institutional fund allocator.
Our internal investment team researches fund managers who are known to excel in a particular asset class or strategy. From our research, we determine who we believe to be the best managers, and we then decide how much of your capital to allocate to each based on your goals and objectives.
We're a mix of professional human investors and technology that streamlines and automates inefficient operational tasks in the investment process. This is why we can scale our decision making to all of you and cut-out the financial advisor. We like to think of Round as the only investment platform where you get a former fund manager as your financial advisor.
The foundational goal of Round is to provide everyone access to a more institutional investment process, similar to how a pension fund allocates its capital.
If you've been following our weekly updates, you've probably noticed a similar theme. The economy is not doing too well, and we are in a market bubble.
We believe that taking on significant equity (stock) risk at this time would be reckless.
When we compare the markets' recovery to the difficult reality that individuals, small businesses, and major corporations are facing on the ground, it's clear that something in the markets isn't right. Stock investing isn't just irrational right now—it's more or less gambling.
The Federal Reserve has been propping up the bond markets, and they will need to do more to keep the stock market afloat.
While we don't have a crystal ball, we believe the market will fall significantly, potentially retesting March's lows within the next 3-6 months.
Why invest now?
This begs the question: what should you be doing with your money right now?
We believe it is a great time to add money to your account.
When a fund sees a market opportunity arising, they raise capital in order to later invest in these opportunities. This is a similar dynamic to what is happening in your Round account.
We strongly believe there will be only a small window of opportunity. The markets are reliant on the Fed right now, and as more companies start to go under, and people are out of work, the inflated markets will fall.
Now, this part is important. The Fed has indicated that they are willing to step in, but they will be reactive instead of proactive. This is when we'll see opportunities come up, right before the Fed steps in again to prop-up the markets.
While we wait for this opportunity, we have been allocating to safer bond strategies, where our clients can stand to benefit from what the Fed is currently buying to prop-up the bond markets.
In short, your excess cash should be put to work in your Round account instead of sitting there in your checking account.
See you next week,
-Saul & The Round Team
Have $100,000 or more to invest? You may qualify for Round Private Client. Contact our team at email@example.com.