Dear Spartan Client,


Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

—Sun Tzu


The world is changing. But isn’t it always? It’s always amazing to us how many in the investment world do not subscribe to a rules-based process that presupposes change will happen. To us, this means employing a process based on time-tested principles without relying on predictions or being influenced by emotion. We are far more interested in having a repeatable process than having a sophisticated-sounding story on a particular “market directional prediction”.

A little market volatility always seems to bring out the financial “experts” with their eulogies for the market. While eventually one of them will be right, just like a broken clock is right twice a day, their predictions are just noise. But, it’s completely within the realm of reasonable human nature to fear an impending crisis when volatility increases, especially when coupled with negative economic/geopolitical headlines. The environment of the last 10-years has not helped quell that fear with volatility, on average, running at historic lows. That has caused more recent volatile periods to feel more intense than they really should be seen from a historic perspective.

Below are the asset classes utilized in our portfolios and their model-driven exposure heading into October. 

Square indicates no change month-over-month. Arrows indicate increase/decrease month-over-month. Adjustments can vary across Spartan Strategies depending on each Strategy’s objectives. What’s illustrated above most closely reflects allocation adjustments for the Spartan Growth Strategy. 

Disclaimer: this note is for general update purposes related to the general strategy and approach of Spartan Planning portfolios. Every client’s situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your exposure to any given asset class will depend on your goals, risk profile, and how tactical or passive your risk profile calls for. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth, please contact your advisor.

At a Glance: Allocation Adjustments Heading Into October, 2021

U.S. Equities: Increasing exposure due to continued positive trends and handoffs from weaker international equities. Large caps continue to be the strongest, followed by mid and small caps.

International Equities: Decreasing, as foreign developed equities join emerging markets in intermediate-term downtrends. The long-term uptrend remains intact for now in both foreign developed and emerging markets. Exposure in this class will be handed up to U.S. equities.

Real Estate: No change.

U.S. and International Treasuries: Decreasing, as intermediate duration bonds in the U.S. and abroad both enter downtrends over the intermediate time frame. Longer duration U.S. bonds have reentered a long-term uptrend but are weakening. International Treasuries remain in an uptrend in the long-term timeframe.

Inflation-Protected Bonds: Exposure will decrease due to the emergence of an intermediate-term downtrend. The long-term trend remains up.

Short-Term Fixed Income: Increasing due to handoffs from longer duration bonds.

Alternatives: Unchanged due to continued downtrends in gold across both timeframes.

Three potential macro catalysts for the recent trend changes:


  • Slow(er) Growth: The Delta variant of COVID-19 appeared to temper economic growth this summer, but economists expect the recovery from the pandemic to reaccelerate as the virus’ toll eases. In recent weeks, many economists have lowered their forecasts for third-quarter economic growth because consumer spending has slowed on dining, hotels, and airline tickets.
  • More Taper Talk: The Federal Reserve signaled it was ready to start reversing its pandemic stimulus programs in November and could raise interest rates next year amid risks of a lengthier-than-anticipated jump in inflation. The Fed’s rate-setting committee indicated in its most recent post-meeting statement that it could start to reduce, or taper, its $120 billion in monthly asset purchases as soon as its next scheduled meeting, Nov. 2-3. Federal Reserve Chairman Jerome Powell said officials hadn’t made a formal decision on how quickly to reduce purchases, but most indicated that a gradual process, “that concludes around the middle of next year is likely to be appropriate.”
  • When the Check Comes: Treasury Secretary Janet Yellen told Congress that the Treasury would be unable to pay all the government’s bills if lawmakers don’t raise or suspend the federal borrowing limit by Oct. 18. The letter from Yellen makes clear that lawmakers have a narrow window in which to approve a debt limit increase or suspension before the Treasury could begin to miss payments on its obligations, triggering a default that could shake markets.

Tempering the Uncertainty in International Stocks with Process

We often talk about the importance of process. September’s action is another great example of this. From a process perspective, our attention to market price trends (rather than predictions) meant we were proactively shifting our portfolios away from emerging markets ahead of what turned into the media frenzy around the Evergrande news. At the end of July, our portfolios were reducing exposure to emerging markets by as much as 40%. In terms of communication, always having a plan via disciplined processes allows us to communicate what is happening and what you can expect. Clarity and consistency are key.

Looking ahead, should international trends continue deteriorating, we will methodically reallocate toward stronger U.S. equity segments should U.S. conditions remain stable. If U.S. conditions deteriorate, then we would likewise reduce our exposure to U.S. equity markets even further. This regimented handoff process aims to not only reduce risk but also to take advantage of opportunities through our single stock process (in eligible accounts) or via our funds. Lately, reducing risk and taking opportunities has meant shifting exposure from sectors like Industrials and Materials more toward Technology and Healthcare.

In fixed income, we will continue retreating from weaker segments of the yield curve or weaker geographic regions, while moving toward areas that are doing a better job of protecting capital. Said another way, we will continue to set aside our egos and listen to what the market data is telling us. Whether it is a market insider, member of the Fed, or member of Congress, someone always seems to know, and price trends usually reflect that knowledge before the news cycle catches up to the data.

As always, continue to trust and stick to your plan. Please never hesitate to reach out when comments and questions arise.

We continue to be honored to help steward your finances.


David Childs, Ira Ross, and Eric Warren

Spartan Planning

Disclaimer: this note is for general update purposes related to the strategy and approach of Spartan Planning portfolios. Every client’s situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your particular exposure to any given asset class will depend on your goals, risk profile, and how tactical or passive your risk profile calls for. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth please contact your advisor. This email and the data herein is not a solicitation to invest in any investment product nor is it intended to provide investment advice. It is intended for information purposes only and should be used by investment professionals and investors who are knowledgeable of the risks involved. No representation is made that any investment will or is likely to achieve results comparable to those shown or will make any profit at all or will be able to avoid incurring substantial losses. While every effort has been made to provide data from sources considered to be reliable, no guarantee of accuracy is given. Historical data are presented for informational purposes only. Investment programs described herein contain significant risks. A secondary market may not exist or develop for some investments portrayed. Past performance is not indicative of future performance. Investment decisions should be made based on the investors specific financial needs and objectives, goals, time horizon, tax liability, risk tolerance and other relevant factors. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Investors should consider the underlying funds’ investment objectives, risks, charges and expenses carefully before investing. The Advisor’s ADV, which contains this and other important information, should be read carefully before investing. ETFs trade like stocks and may trade for less than their net asset value. Spartan Planning Group, LLC (“Spartan” or the “Advisor”) is registered as an investment adviser with the United States Securities and Exchange Commission (SEC). Registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the Adviser has attained a particular level of skill or ability. Indexes are unmanaged and do not incur management fees, costs, and expenses. Spartan’s risk-management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk or the ability to control risk. There are risks associated with any investment approach, and Spartan strategies have their own set of risks to be aware of. First, there are the risks associated with the long-term strategic holdings for each of the strategies. The more aggressive the Spartan strategy selected, the more likely the strategy will contain larger weights in riskier asset classes, such as equities. Second, there are distinct risks associated with Spartan Strategies’ shorter-term tactical allocations, which can result in more concentration towards a certain asset class or classes. This introduces the risk that Spartan could be on the wrong side of a tactical overweight, thus resulting in a drag on overall performance or loss of principal. International investments may involve additional risks, which could include differences in financial accounting standards, currency fluctuations, political instability, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks. Diversification strategies do not ensure a profit and do not protect against losses in declining markets