Happy New Year and (a belated) happy holidays!
In the 4th quarter of 2020, we experienced continued deceleration of GDP in the United States with new mild acceleration of inflation. We remain in an industrial recession, but the consumer remains relatively stable and strong. The equity markets have continued to reach new highs and the Federal Reserve remains dovish… and ready to pour even more “easy money” into the financial system, as needed.
In 1Q 2020, I expect more of the same conditions, and our portfolios will remain allocated in our cautiously optimistic positions.
2Q 2020, on the other hand, is setting up to be a bit more explosive… and we will adjust our portfolios accordingly as we receive confirmation of economic conditions in March and April. I will share more about this with you in the coming months.
For now, we are generally staying the course regarding our portfolio asset allocation for the first quarter of 2020. The best overall strategy in current market conditions remains: Cautiously Optimistic.
This month, we are increasing our stock exposure and commensurately decreasing our bond exposure. Your portfolio(s) is/are allocated as follows:
- 50% US and International Stocks (tilted towards growth)
- 10% US and International Bonds
- 15% US and International Real Estate
- 0-5% Cash
- 15% Gold
- 0-10% Bitcoin
If you are a Vailshire Client, feel free to log into your Vailshire-managed account(s) at Interactive Brokers and notice how your own portfolios are positioned! (It’s a good idea to log into your accounts occasionally, just to make sure your settings and demographics are up to date.)
GDP continues to decelerate while inflation is starting to pick up. We continue to remain cautiously optimistic and diversified across multiple asset classes, with a bent towards growth stocks. The future is bright and our portfolios continue to capture upside gains while protecting against downside losses.
If you have any questions, or know of a friend or family member who may benefit from Vailshire’s innovative investment techniques, please let me know. I would be honored by the referral!
Investing wisely with you,