The Bigger Picture

Summer was extended down here in Dallas. Ninety-plus degree days almost every day in September. Seemingly the same thing every day, like the markets these past many months. Change will happen, though it seemingly hasn’t yet.

When we drew our line in the sand, almost two years ago, that the next move for stocks would be down, little did we know how long the wait might be. Obviously I stand by my call because I bring it up often. More importantly it still holds up well. What have you missed in stocks?

But if you haven’t sold some of your stocks you haven’t built up your cash and you haven’t increased your commitment to The Select Approach^TM. Unlike every other investor, you have The Select Approach^TM as an alternative to stocks, bonds, gold, commodities, real estate, private equity and whatever other mash up you may or may not have tried.

But while you may not have missed much in stocks these past couple of years, maybe you felt you missed something in bonds, particularly this year. Yes, bonds have performed well this year, but our line in the sand for bonds was seven long years ago. Again, I will put up our performance from The Select Approach^TM versus bonds over the past seven years and I expect the performance should hold up for many years to come.

Hopefully you have been blessed with your other investments over the past years. But odds are, you must do something to realize the fruits of your investment. This is the reason I put so much emphasis on my lines in the sand. The long-term trend for bonds has been down since 2012; for stocks these past twenty four months.

For those who continue to own stocks and bonds, the trend is not your friend. The trend is working against you. While others bemoan they have no other alternative than staying invested, you do.

The narratives you hear may say something completely different. The economy is doing well. Unemployment is low. Inflation is lower (nonexistent!). The narratives are not important. What comes next is what is important. That is the basis for investing: doing something today (or not doing something) because you expect something more down the road.

When it comes to stocks, bonds, gold commodities, real estate, private equity and whatever other mash you may or may not have tried, we believe they all have reached the end of their upward trend. We have gone from anything but cash to anything as long as it is cash.

Yes it has been many years in the making and it may be many more years before the narrative finally says Cash is King. But that will be too late. Now is the time to move to cash, to move to The Select Approach^TM and to harvest the decisions you made years ago. It is time for this decision.

Fort Worth Independent School District, TX
Aaa (Aa1 Under) Moody’s  AAA (AA Under) S&P

Permanent School Fund Guaranteed

Due 2/15 Dated 10/31/19 Maturity 2/15/2044

$139,350,000 Sold

1 2021 5.00% 1.12%
2 2022 5.00% 1.12%
3 2023 5.00% 1.15%
4 2024 5.00% 1.18%
5 2025 5.00% 1.22%
6 2026 5.00% 1.29%
7 2027 5.00% 1.36%
8 2028 5.00% 1.42%
9 2029 5.00% 1.50%
10 2030** 5.00% 1.55%
11 2031** 5.00% 1.61%
12 2032** 5.00% 1.65%
13 2033** 2.375% 2.39%
14 2034** 2.375% 2.44%
15 2035** 3.00% 2.30%
16 2036** 2.50% 2.54%
17 2037** 2.50% 2.61%
18 2038** 2.625% 2.65%
19 2039** 2.625% 2.69%
20 2040** 2.625% 2.72%
24 2044** 2.625% 2.74%

*Yield to Worst (Call or Maturity) **Call 2/15/29

Source Bloomberg

This is an example of a new issue priced the week of 10/7/19

Prices, yield and availability subject to change