June Portfolio & Market Review

Paul Wildberger |
Categories
Investments
financial planning
Monthly Market Commentary

We continue to enjoy outperformance YTD vis-à-vis the S&P 500.  S&P 500 is down -5.8% YTD, while our average portfolio is up +3.6%; we are effectively outperforming the general stock market by 9.4% points!!

 

Portfolio review:

  1. Bonds and gold remain very stable, especially given the recent rally in stocks.  Typically, we would see these asset classes decline over time during a stock rally; however, we are not.  Why?  Investors doubt this stock rally (as do we) and continue to buy the recession stalwarts of bonds and gold.

 

  1. The gold miner linked Structured Note we purchased in Dec 2019 is likely to be called in July (as was the previous Note) because of its significant performance over the past 6 months.  This will return cash to our portfolios. 
    1. Depending on the next offering of a gold miner linked Structured Note, we might reinvest, but only a max of 50% of your cash proceeds.
    2. The remaining 50% will be in cash, reinvest in current positions to rebalance, and remain ready for future opportunities in Distressed Opportunities.
    3. Our income portfolios will identify investments to help replace the 8.4%/yr yield we had on the called Structured Note.

 

  1. Our recently added Distressed Opportunities positions have done extremely well since incorporation.  However, I want to caution this segment is at least a 1-2yr time horizon for maximum benefit in price appreciation.

 

Economic review:

  1. Recent economic data continues to outline a dour year ahead.  From major unemployment, GDP decline, consumer spending, corporate losses, and declining business capital investment, we are far from out of the woods in this recession.
  2. Market pundits continue to believe in a V shaped recovery, or a 2nd half 2020 rebound in economic activity that defies logic and reality. 
    1. Furthermore, politicians, downplaying a bleak situation, are not to be relied upon for guidance.
    2. We prefer to follow the admonitions and unbiased projections of the Federal Reserve, who are not politically motivated.  Chairman Powell recently forecasted that economic activity will not return to pre-coronavirus levels until EOY 2021.  We agree!
  3. Fresh tensions with the Chinese only exacerbate an already fragile recovery.  With their decision to essentially take away Hong Kong’s independent status, the future of this city as an Asian financial hub is tenuous.  Additional U.S. and global criticism of their handling of the coronavirus outbreak has caused a defiant denial and potential retaliation, especially given President Trump’s press conference yesterday.

 

Wishing you all a fantastic weekend, and as always, contact us with any questions or concerns you might have,

 

Paul

 

Paul Wildberger, CFP®, MBA

President, Integrity Private Wealth Advisors, LLC

10000 N. Central Expwy #400

Dallas, TX 75231

214-729-1460