Special Investment Update

In the midst of ongoing market turbulence, it’s natural to ask: Am I in the right strategies for this market environment? For decades, the investment industry has repeated mantras like “Just stay invested” or “Don’t miss the 10 best days.” But while these ideas are popular, they don’t reflect the full truth — or the disciplined strategies we believe in at CMR Financial Advisors.

Warren Buffett, the most successful equity investor of the last 58 years, doesn’t follow a “stay invested no matter what” approach, as he has $350 billion in cash now. Neither do we.

The Myth of the 10 Best Days — and the Truth They Leave Out

It is true that missing the 10 best days over 40 years can significantly reduce returns. But here’s what the financial industry rarely tells you: 7 out of the 10 best days typically occur during bear markets — often immediately after the worst days. Staying fully invested to capture those moments means you’re likely experiencing the worst drawdowns, too.

In fact, missing the 10 worst days has a far greater impact than missing the 10 best. According to Real Investment Advice, avoiding the 10 worst days can lead to portfolio growth that is more than double that of a buy-and-hold strategy.

Note from this chart, the black line represents avoiding both the 10-Worst and 10-Best Days, which also far outperforms the blue line of “buy and hold and hope.” Yet the reason Wall Street continues to push buy-and-hold investing is simple: it generates more profit for them when you remain fully invested. But that isn’t our priority. We exist to serve you — not Wall Street. Of our six exit strategies triggering going to cash, they began triggering over a month ago and completed before the relative bottom was hit April 8th. If history repeats itself, April 8th likely is not the bottom.

Interestingly, October is historically the most common month for bear markets to end.

Meanwhile, if April 8, 2025 was in fact the bottom as it currently stands, returns over the following 1-2 years historically average 41.1% and 57.8% respectively.

Why We Use a Different Strategy at CMR Financial Advisors,

Our philosophy isn’t emotional, passive, or based on hope. Instead, we use back-tested, algorithmic research that we have patented, as well as moving average crossovers to proactively reduce exposure to major market risk — without attempting to time the market perfectly.

The difference is clear, as shown below in both charts by Portfolio Visualizer, by simply using an 18-month moving average Advance & Protect (TM) hypothetical strategy (Note, that most of CMR Financial Advisors, Advance & Protect (TM) portfolios use various moving averages and exit strategies):

• Lower maximum drawdowns: -25.35% vs. -50.80%
• Lower volatility on average: 11.27% vs. 15.40%
• Higher risk-adjusted returns: Higher Sharpe and Sortino ratios

What This Means for You

Your current portfolio likely holds more cash than usual — and that’s intentional. With interest on short-term U.S. Treasury ETFs like BIL yielding 4.77%, that cash isn’t idle; it’s working while we wait.

This buffer provides us with flexibility. If the market trends higher, we can redeploy. If another leg down occurs, we’re protected.

We are not trying to call the bottom. We’re applying a tested, disciplined approach to:

• Trim winners before or just after they become overvalued
• Sell under-performers before major losses compound
• Hold cash tactically and reinvest wisely

If you have questions or want to review your positioning, we are here to help.

In your corner,

Cliff M. Robello, CFP®, ChFC

Sheri Cabral, President

CMR Financial Advisors | (808) 537-2912

Mailing Address:

111 Hekili St Ste A PMB 607

Kailua, HI 96734

Office:

1003 Bishop Street, Suite 2620

Honolulu, HI 96813

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