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


Dynamic asset allocation is often associated with downside risk management, but Todd Stankiewicz, a Chartered Market Technician® at SYKON Capital, explains that the same technical framework can also be used to evaluate participation during favorable market trends. Here he discusses how technical signals may inform portfolio positioning during periods such as the bull markets that followed 2009, 2020, and parts of 2023 to 2024. For additional context, see This Is Not a Buy and Hold Pep Talk.

One common misconception about this approach is that dynamic asset allocation is always defensive. I do not view it that way. The same framework used to evaluate risk can also be used to evaluate whether market trends remain supportive of staying invested.

Think about the bull markets that followed 2009, 2020, and parts of 2023 and 2024. Investors who remained entirely on the sidelines may have missed significant market appreciation. One challenge in portfolio management is balancing downside risk with the risk of being underinvested during strong market environments.

Dynamic allocation seeks to adjust exposure based on market conditions, which can include maintaining exposure during stronger trends and becoming more cautious when conditions weaken.

As a Chartered Market Technician®, I use technical signals to evaluate trend strength, momentum, and price behavior, not just deterioration. When price action and market breadth remain constructive, that can support maintaining exposure. When conditions change, that assessment may change as well. The process is intended to be evidence-based and disciplined rather than driven by headlines or short-term predictions.

Dynamic allocation is not about avoiding markets altogether. It is about evaluating the environment in front of you and adjusting portfolio positioning accordingly.

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


About the Author

Todd Stankiewicz | Chief Investment Officer, SYKON Capital

Todd Stankiewicz is the Chief Investment Officer of SYKON Capital, a fee-only 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.

Learn more at www.sykoncapital.com


^{Advisory services are 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.}