Autumn is upon us and the leaves are just starting to turn here in Colorado Springs. I warmly welcome the cooler weather after this year’s long, hot summer!
I hope all is well with you.
Not to sound bleak, but I continue to see real-time signs of a slowing US economy, minimal inflation, increasing geopolitical risks, and richly valued stocks near all-time highs. In addition, as companies start to report their 3rd quarter business results this month, they are almost certain to report numbers consistent with an earnings recession.
In short, I believe that the stock market remains overly (even recklessly) over-valued at a time when its participants should be more cautiously positioned than any time since 4Q 2018. Bond market participants already see the writing on the wall, explaining why long-term US Treasury yields have fallen from approximately 3.08% to near 1.65% today over the past 12 months.
Vailshire’s Mandate: To Grow and Protect
As before, we remain in protection mode given the current market conditions. Our portfolios hold positions that historically perform well in times of decelerating GDP and inflation. Simultaneously, we actively avoid holding positions that have historically under-performed during such times.
Current holdings include:
- Real estate investment trusts (REITs)
- US Treasurys (short- and long-duration)
- International sovereign bonds
- Preferred stocks
- Some healthcare equities
- Some consumer staples equities
- Bitcoin or bitcoin proxies
- US Dollars (cash)
As always, feel free to check out your separately managed account(s) and see how your money is being invested in this way.
Everything cycles… a these cautionary asset protection times won’t last forever. While my goal is to grow the value of your portfolio regardless of market conditions, it certainly gets easier when underlying economic fundamentals are actually supportive of growth! When conditions become more favorable, I will inform you of it and position your portfolios accordingly.
In the meantime, enjoy the beautiful Fall weather and let me know if you have any questions. If you have any personal matters or business partnerships you would like to discuss, please reach out.
Investing wisely with you,