The S&P 500 index measures the performance of the largest 500 publicly traded companies within the U.S. It’s a commonly followed index often referred to as the stock market. Despite short-term volatility and headwinds, e.g., COVID-19 and economic lockdowns, the stock market has persevered and continues to reach for new highs. However, not all sectors and companies have participated; in fact many have been left behind while others have significantly outperformed. For example, since the February 2020 market peak to February 2021 time period, sectors such as utilities, energy and real estate have not only underperformed the market but also delivered negative returns to investors. Meanwhile, other sectors such as technology, communication services and consumer discretionary, have generated positive returns and outperformed the market.

It’s also important to recognize that the stock market is comprised of individual operating companies, each having their own story and each facing their own challenges and opportunities. At Peloton, we are active portfolio managers investing in individual, high-quality operating companies. We view the stock market as a market of stocks and analyze the underlying business of every stock we own. We develop a price target for each stock and continually monitor progress towards that target. When a stock approaches its target, we reassess the future opportunity and either take profits or raise the target and hold the stock. Holding periods depend entirely on the stock’s performance and our ongoing assessment of future performance opportunities. Client portfolios generally consist of 20-25 stocks, and the composition of stocks is customized to each individual household. By owning individual securities, we can tightly control the risk, diversification, dividend characteristics, and tax implications.

An active, research-driven investment management approach focused on high-quality, individual operating companies is a prudent strategy for long-term investing.



Past performance is no guarantee of future results.  Investing involves risk, including possible loss of principal.  Diversification may not protect against market risk or loss of principal.  The opinions expressed above should be construed as neither investment advice nor a solicitation to buy or sell securities.  Actual investor results may vary.

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