^{By Todd Stankiewicz | CIO, SYKON Capital | Portfolio Manager, Free Markets ETF (FMKT)}

Dynamic asset allocation is often misunderstood as a permanently defensive posture. Todd Stankiewicz, CMT® and CIO at SYKON Capital, explains how he evaluates dynamic asset allocation relative to a traditional buy-and-hold approach during major market drawdowns such as 2008, 2020, and 2022. He also outlines how an evidence-based framework may adjust exposure as market conditions change. For additional context on how he discussed risk during the April 2025 selloff, read This Is Not a Buy and Hold Pep Talk.

Buy-and-hold can be an appropriate long-term strategy for some investors, but periods like 2008, 2020, and 2022 show that static allocations can still experience significant drawdowns. In 2008, the S&P 500 dropped roughly 57% from peak to trough1. In early 2020, markets fell more than 30% in a matter of weeks2. In 2022, both stocks and bonds declined together, which challenged the expectations many investors had for traditional balanced portfolios3. That period also highlighted correlation risk, including environments in which bonds may not provide as much diversification benefit as investors expect.

The emotional and financial damage from those drawdowns can be long lasting, and for certain investors it can take years to recover, if they recover at all. Large drawdowns can have both financial and behavioral consequences, particularly for investors who need liquidity, are nearing retirement, or are already taking distributions from their portfolios.

My approach focuses on evaluating what the market is doing rather than assuming conditions will improve on a specific timeline. As a Chartered Market Technician®, I use price trends, momentum, and other technical indicators as part of the decision-making process. When the weight of the evidence changes, portfolio positioning may change as well. The objective is not to predict the future or avoid every decline. It is to use a rules-based process to manage risk, remain flexible, and respond to changing market conditions in a disciplined way.

^{Past performance is not indicative of future results. This content is for informational purposes only and does not constitute investment advice}


About Author

Todd Stankiewicz | Chief Investment Officer, SYKON Capital

Todd Stankiewicz is the Chief Investment Officer of SYKON Capital, a fee-based registered investment advisor with offices in Westchester County, NY and Jupiter, FL. He is a recurring guest on Fox Business and the Schwab Network, where he discusses markets, portfolio strategy, and investor behavior. Todd is also the portfolio manager of the Free Markets ETF (FMKT).

Learn more at www.sykoncapital.com


^{Disclosure
Advisory Services offered through SYKON Capital LLC, a registered investment advisor with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.  The information contained in this presentation has been compiled from third party sources and is believed to be reliable as of the date of this report. Past performance is not indicative of future returns and diversification neither assures a profit nor guarantees against loss in a declining market. Investments involve risk and are not guaranteed.}