January/February 2020 Update

I hope all is well with you.

We are having a warm and windy weekend here in Colorado…. It’s hard to believe that we’ll be covered in snow, with temps dropping below zero, in the next 3-4 days!

Similar to 4Q in 2019, the GDP in the United States continues to decelerate while inflation tepidly accelerates. Not helping matters is the coronavirus, which has been stealing headlines and spreading worry around the world.

When China sneezes, the rest of the world catches cold

The effect of the virus has been drastic for China–the world’s second-largest economy–as their quarantine efforts have resulted in thousands of large and small businesses being temporarily shut down. (Examples of such businesses that are familiar to us include Disney and Starbucks.) The medium-to-long-term financial impact is difficult for business leaders to discern, since the virus is still spreading. Likewise, the stock market–which is always “forward-looking”–spent much of January faltering because of uncertainties on the timing of containment and of the impact on the growth and earnings of businesses.

The Federal Reserve continues to support the market via its (now infamous) “not QE” program and through frequent soothing speeches, extolling the ongoing strength of the US economy and of its consumers. The response of the bond, gold, and bitcoin markets suggest that they are not so easily convinced by the Fed’s comments.

We may be in for a legitimate recession during 2Q of 2020 but, for now, we remain cautiously optimistic regarding the performance of select stock sectors, bonds, bitcoin, real estate, and gold for the foreseeable future. In light of that, our portfolios remain (approximately) allocated in the following diversified manner:

  • 50% US and International Stocks (tilted towards growth)
  • 10% US and International Bonds
  • 15% US and International Real Estate
  • 0-10% 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.)


The world and the world’s stock markets remain in mild turmoil. Only time will tell if these conditions wane or increase as new data becomes available to us.

At Vailshire, our portfolios remain well-positioned and diversified for the best and worst of whatever lies ahead. I’m thankful for the privilege to grow and protect your hard-earned savings during these wild times.

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,