Performance Report: 07/31/2025
All performance data for our strategies is net of all fees and expenses. All performance data for indexes or other securities is from sources we believe to be reliable. All data is as of 07/31/2025.
Investment Strategy
MAP - Full ($500k+)
MAP - Plus
MAP - Balanced
S&P 500 Index2
Mod Alloc(AOM)2
Growth Alloc (AOR)2
July Return
2.3%
1.5%
0.4%
2.2%
(0.1%)
0.1%
YTD
15.8%
N/A
N/A
7.8%
6.5%
8.0%
Inception1
72.0%
N/A
N/A
115.2%
39.5%
56.5%
Sortino3
0.98
N/A
N/A
0.80
0.47
0.60
(Disclosure: We added performance figures for our new strategies solely on a month-to-month basis as any prior data will be inconsistent and potentially misleading. We will post continuous data for our full-size MAP Strategy since its inception on 5/1/2019. We use AOM and AOR as our benchmarks as they are low-cost index funds that model the exposure of the majority of retail investors. Our risk measures are aligned closely with these funds. It is important to note that individual account performance varies and your account may perform better or worse than its model. The model's performance is simply the average performance of all accounts participating in the model.)
Performance Update
July was a solid month for us, with all strategies appreciating in line with their risk tolerance. While stock markets gained in July, our benchmarks were essentially flat. So, it was another month of outperforming most of our peers. I began positioning our portfolio more defensively over the past couple of months, so it is encouraging to continue to see gains.
I'm going to keep this update short as I am exhausted from last week's office move and I'm traveling this week. That said, I'll be working remotely, and our team remains available during normal business hours. Once our new offices are set up, we look forward to having y'all stop by.
Market Commentary
Stock markets continued climbing in July, defying negative economic news and ongoing geopolitical turmoil. But that's what markets do just as bubbles begin to pop. Markets experienced a sharp selloff at the month's end, largely driven by a dismal employment report. It turns out the Department of Labor has been "cooking the books" for some time. While the ADP employment report has been showing a more negative outlook on the employment situation, the DOL's report looked far rosier. That changed on Friday, when they released not only a grim report but also "corrected" numbers from previous months. Having worked for Arthur Andersen, I know all too well how easily numbers can be manipulated to fit a narrative, but eventually the truth surfaces.
It's widely accepted that the retail consumer constitutes 70% of our nation's economy. If job losses mount, the next steps are layoffs and wage cuts, making a recession nearly unavoidable. Main Street is already burdened by a truckload of debt, and if people can't service that debt, the consequences won't be pretty.
Here's a snippet from Bloomberg that sums up the investor's dilemma:
Some of Wall Street’s biggest firms are warning clients to prepare for a major market pullback as sky-high equity valuations slam into souring US economic data. (Source: Bloomgerg Evening Briefing)
While economic fundamentals have been fairly dire for some time, technical indicators now suggest a move lower in equity prices is becoming more likely. For the past couple of months, the market has been signaling weakness on the horizon. Earnings underwhelmed across the board, aside from a few of the MAG 7 stocks that heavily influence the index. Despite weak economic data and bearish technicals, stocks have continued to climb. This is a testament to the FOMC's ability to pump liquidity into markets. As JFK said, "a rising tide lifts all ships"; well, "a debased currency lifts all securities." The Fed continues to aggressively print money, driving capital into markets and inflating asset prices even as the economic backdrop worsens.
Eventually, something has to give. Either the economic data improves, or the stock market declines. Until recently, the Fed seemed to be winning that tug-of-war, but they appear to be losing their grip. We're caught in the middle, and it's crucial we stay sharp and monitor developments closely. Progress on geopolitical issues, especially tariffs, or easing inflation could improve the economic outlook and lift equities. But, for now, the market is signaling that taking on additional risk isn't prudent.
Conclusion
Thus far, we've been fortunate to enjoy strong year-to-date gains. Given those gains and the precarious position of the stock indexes, I'll continue to take a defensive stance until the markets suggest otherwise. We're always happy to adjust the risk level of any client's portfolio, but for the foreseeable future, I expect us to remain cautious.
As always, please don't hesitate to call us at 512-553-5151 if we can be of any assistance.
Best,
Matt McCracken
1) Inception date of 4/30/2019
2) All benchmark prices and returns are obtained through IBKR's PortfolioAnalyst reporting tool. S&P 500 Index is calculated using the index price. AOM is the iShares Core 40/60 Moderate Allocation ETF. AOR is the iShares Core 60/40 Balanced Allocation ETF. These benchmarks were chosen as they represent the prevailing investment strategies of retail advisors.
3) The Sortino ratio is a commonly used measure of "alpha" or the value a manager adds to a portfolio. It is similar to the Sharpe ratio. The Sortino ratio does emphasize the negative impact of downside volatility more than the Sharpe ratio which is why we use it as our primary measure of alpha.