I hope that each of you had a wonderful Thanksgiving week!
As I wrote in last month’s update, the US economy has been showing signs of moving from bad-to-less-bad in the short term, which means that we can be cautiously optimistic in our investment style. While we are still seeing slowing economic (GDP) growth relative to the previous 1-2 years, inflation is starting to perk up a bit.
This combination of decelerating GDP and accelerating inflation–coupled with a neutral or accommodative Federal Reserve–means that growth stocks tend to perform decently (historically-speaking) than when both GDP and inflation are decelerating together.
All this means for you is that we are generally staying the course regarding our portfolio asset allocation for the foreseeable future. The best overall strategy in current market conditions remains: Cautiously Optimistic.
Over the past month we nudged up our stock exposure and commensurately nudged down our bond exposure. Your portfolio(s) is/are allocated as follows:
- 40% US and International Stocks (slightly tilted towards growth)
- 20% 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.)
Conclusion
As I concluded last month:
“Our country remains in an industrial recession. However, a strong consumer, slightly accelerating inflation, a low unemployment rate, and an accommodative Federal Reserve give us reasons to be cautiously optimistic about the performance of growth stocks and related assets in the coming months. Given this, I have positioned our portfolios to be defensive, yet somewhat growth-oriented for the first time in many months.”
Nothing has changed from a macroeconomic perspective since I wrote that one month ago. Let’s stay the course.
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,
Jeff