This post was authored by Adem Tumerkan, Dunham's Content Writer. If you have questions concerning today's topic, please call us at (858) 964 - 0500. Hold us to higher standards.

Over the past two years, DunhamDC has done what most investors won’t - buying when markets are full of fear and selling when greed takes over.

Now, with volatility returning and markets facing meaningful corrections, DunhamDC is once again seizing opportunities where others hesitate.

So, let’s catch up on recent DunhamDC action.

Stock Market Correction: What Triggered the Recent Sell-Off?

In just three weeks, U.S. markets erased $5 trillion in value, sending investors scrambling1.

And over the last week, we've seen the:

  • S&P 500 fall -6%
  • Nasdaq Composite fall -8.4%
  • Dow Jones fall -5%

In fact, as of this writing, the S&P 500 has entered correction territory, down 10% from its peak, while the Nasdaq has plunged 11%2.

So, what triggered this market chaos?

Mr. Market’s Mood Swings: Panic Sets In

Thus, on the back of all this, Mr. Market panicked and sold equities.

  • Who is Mr. Market? He is a fictional character created by Benjamin Graham to represent the stock market’s emotional swings, where he flips irrationally between greed (overpaying in euphoria) and fear (selling too cheaply in panic) – thus offering opportunities for disciplined investors.

Put simply, Mr. Market is the market.

Mr. Market reacted negatively as fear of a recession set in. Volatility skyrocketed as traders dumped stocks. Even U.S. Treasury Secretary Scott Bessent called the correction "healthy," saying markets had been too euphoric beforehand.

The Opportunist Mindset: DunhamDC Bought as Others Sold

So, while Mr. Market was busy running for the exits as trillions in value vanished, DunhamDC saw the opportunity.

On Wednesday, March 12th, as fear peaked and trillions in value vanished, DunhamDC hit a trigger point - stepping in to buy and position itself ahead of the next market rebound.

Some of DunhamDC’s Recent Strategic Moves:

  • March 12: Increased allocations in equities as markets sold off.

  • March 4: DunhamDC US (our U.S.-only strategy) had already been active by buying, capitalizing on earlier market fears.

Here’s a chart showing the last two-plus years of DunhamDC buying (green arrow) and selling (red arrow) and the current weighting of the DC 60/40 strategy relative to the market (blue line).

And here’s a chart showing the current weightings of all four DunhamDC portfolios.

DunhamDC Allocations
As of March 12, 2025 to present

Meanwhile, DunhamDC US – the U.S.-only strategy - had already been active on March 4th, taking advantage of earlier volatility and strategically increasing positions while others dumped stocks.

Here’s a chart showing the last nine months of DunhamDC US buying (green arrow) and selling (red arrow) and the current weighting of the DC US 60/40 strategy relative to the market (blue line).

Notably, DunhamDC US has been highly active thus far in 2025:

  • January: Buying as markets sank, then selling weeks later at higher prices.
  • March: Buying again - at even cheaper valuations.

Here’s a chart showing the current weightings of all four DunhamDC US portfolios.

DunhamDC US Allocations
As of March 5, 2025 to present

This is DunhamDC in action: buying fear, selling greed - and systematically taking advantage of market swings.

How DunhamDC’s Market Strategy Can Capitalize on Fear and Greed

DunhamDC sticks to its core theme of:

  • Buying when markets are soaked in Fear
  • Selling when markets surge on Greed

Think of it this way. . .

Imagine a crowded marketplace. A sudden storm rolls in, and vendors flee in panic.

But DunhamDC stays, buying valuable goods at deep discounts. Thus, when the storm passes, we reap the rewards while others regret their exits.

This is what DunhamDC was built for:

  • Removing emotion from investing
  • Capitalizing on fear-driven selloffs
  • Selling at higher prices when markets become greedy

 

 Why This Matters for Investors

While others rushed for the exits, DunhamDC grabbed the opportunity.

Remember, markets - like emotions - are cyclical. History shows the best returns come to those who lean into volatility, not run from it. And it also shows us that people feel losses much more than gains, thus they panic easily.

As Warren Buffett famously said, “Be fearful when others are greedy, and be greedy when others are fearful.”

DunhamDC is built to buy when fear dominates and sell when greed takes over.

So, what’s next?

  • If the market drops further, DunhamDC will continue buying.
  • If markets rebound, DunhamDC will sell.

It’s that simple.

Stay tuned for updates on our next moves.

In the meantime, want to learn more? Download our DunhamDC Strategy Brochure and our "Who Is Mr. Market?" One-Pager

Or better yet, connect with our Business Development Team via email or (858) 964-0500 for insights into our latest investment strategies.

Take care.

Sources:

  1. U.S. stock market loses $5 trillion in value in three weeks
  2. The S&P 500 Joined the Nasdaq in Correction Territory Last Week. Here's What Could Happen Next.
  3. New York State factory activity plunges in March, NY Fed says

Disclosures:

This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation. Any investment products or services named herein are for illustrative purposes only, and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.

Past performance may not be indicative of future results.  No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. There may be economic times when all investments are unfavorable and depreciate in value.

DunhamDC (“DunhamDC”) is a proprietary algorithm of Dunham & Associates Investment Counsel, Inc. (“Dunham”) that seeks to mitigate sequence risk, which poses a threat to an investor's returns due to the timing of withdrawals. The algorithm employs what Dunham considers to be a pragmatic strategy, generally making incremental increases to the equity allocation when global stock market prices decrease and decreasing it when global stock prices increase. The U.S. variant of DunhamDC generally increases equity exposure as domestic stock prices decrease and reduces equity exposure when domestic stock prices increase. This approach is objective, unemotional, and systematic. Rebalancing is initiated based on the investment criteria set forth in the investors application and is further influenced by the DunhamDC algorithm.

Due to the large deviation in equity to fixed income ratio at any given time, investor participating in DunhamDC understands that a large deviation in equity to fixed income ratio can have significant implications for the risk and return profile of the account. Accordingly, during periods of strong market growth the account may underperform accounts that do not have the DunhamDC feature. Conversely, during periods of strong market declines, the account may also be underperforming, as the account continues to decline, due to the higher exposure in equities. Similarly, if the fixed income investments underperform the equity investments, it is possible that the accounts using the DunhamDC feature may underperform accounts that do not have the DunhamDC feature, even though they may have adjusted the exposure to equity investment before a decline. Therefore, the investor must be willing to accept the highest risk tolerance and investment objective the account can range for the selected strategy. Please see the Account Application for the various ranges.

DunhamDC uses an unemotional, objective, systematic approach. The algorithm does not use complex formulas and is designed to create a consistent process with limited assumptions based on historical data.

DunhamDC may make frequent purchases and redemptions at times which may result in a taxable event in the account and may cause undesired tax-related consequences.

Trade signals for DunhamDC are received at the end of each trading day with the implementation of the trades not occurring until the next business day, which means that there is a one-day lag that may result in adverse prices.

DunhamDC operates within predefined parameters and rules, some or all of which may not be available to review.  While this approach can reduce emotional biases and enhance consistency, it may limit adaptability to changing market conditions, economic considerations, or unforeseen events.  Extreme conditions may require deviations from the program’s prescribed approach, and such adaptability may be challenging to incorporate. The DunhamDC algorithm is programmed based on specific criteria and rules, it may not capture certain qualitative or contextual factors that can impact investment decisions or movement in the markets.  Beyond the initial assumptions used to develop the algorithm, it lacks other inputs or considerations that human judgement and discretion may be necessary to evaluate.  DunhamDC may utilize historical data, statistical analysis, and predefined rules. It does not make any predictions and may add to certain investments before they perform poorly or may divest from other investments before they perform well. Dunham makes no predictions, representations, or warranties as to the future performance of any account.

Accounts invested in DunhamDC are subject to a quarterly rebalance to its target allocation at the time based on DunhamDC in addition to the signals provided by DunhamDC at any given time.

Dunham makes no representation that the program will meet its intended objective. Market conditions and factors that influence investment outcomes are subject to change, and no program can fully account for all variables and events. The program requires making investment decisions based on factors and conditions that are beyond the Account Owner’s and Dunham’s control.

DunhamDC is NOT A GUARANTEE against market loss or declines in the value of the account or a timing strategy. Investor may lose money. 

Asset allocation models are subject to general market risk and risks related to economic conditions.

DunhamDC has a limited track record, with an inception date of November 30, 2022.

DunhamDC US has a limited history, with an inception date of July 1, 2024.

For more information - please view DunhamInsights.

Index Definitions

S&P 500 Index - The S&P 500, or the Standard & Poor’s 500, is a stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. The S&P 500 Index components and their weightings are determined by S&P Dow Jones Indices. It differs from other U.S. stock market indices, such as the Dow Jones Industrial Average or the Nasdaq Composite index, because of its diverse constituency and weighting methodology. It is one of the most commonly followed equity indices, and many consider it one of the best representations of the U.S. stock market, and a bellwether for the U.S. economy.

The NASDAQ Composite Index - The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.

The Dow Jones Index - The Dow Jones Index is an index of certain stock prices on the New York Stock Exchange, computed by the Dow Jones Publishing Company as a weighted average of the prices of specific stocks in certain categories.  Three indices are maintained, the Industrials, the Transportations and the Utilities. When used without qualification, the term usually refers to the Down Jones Industrial Average.

Investors cannot invest directly in an index or benchmark.

Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA/SIPC. Advisory services and securities offered through Dunham & Associates Investment Counsel, Inc. 

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