Market insight and a highlight of Cabana’s year-to-date performance:
Cabana’s seven portfolios range from “Conservative” to “Aggressive” and include an income strategy and an “Accumulator” portfolio. Performance is as of market close on April 9, 2018 and is presented net of maximum advisory fees and commissions.
All Cabana Portfolios were up over the past week, ranging from +.02% (Growth) to +1.69% (Accumulator).
Equity Markets continue to be remarkably volatile. We continue to see swings of greater than 1% in all major indexes daily. Between rising interest rates, trade tariffs, and U.S political uncertainty at the highest levels, “traders” have taken over for “investors” and are running the show. I saw an interview with legendary investor John Bogle this week. Mr. Bogle is the founder of Vanguard and has been investing professionally for more than 66 years. He was asked about this year’s extreme volatility and replied that in all his years in the markets he has never seen the sustained and violent moves in price that we are now seeing. To put that statement into context, he pointed out that he has lived through two 50% corrections, numerous 25% corrections, as well as the crash of 1987, when the market dropped 20% in a day. Wow! That is really saying something. The follow up question posed to him was, “So, what do you do in this environment?” His answer is as poignant as it is timeless. He stated, “Volatility is of interest to speculators, not long-term investors.” What Mr. Bogle is confirming is that long-term investors are only interested in what ultimately drives growth and corporate profitability. Those things are interest rates, which determine relative value among asset classes and earnings, which determine valuation of equity share price. These two fundamental factors are inherently interrelated. What long-term investors are not concerned with is price movement resulting from news, politics or general hysteria. These things can and do result in sometimes abrupt and severe market moves. They do not in and of themselves impact markets long-term, unless they are effecting interest rates and earnings downstream. It is those underlying changes that we watch for and respond to. For now, interest rates have stabilized and we anxiously await earnings season. We remain cautiously bullish.
Year-to-date net-of-fees performance:
ALPHA INCOME: -1.83%
Performance is presented net of the maximum advisory fees and commissions (2%). Numbers indicated with (+) for positive return and (-) for negative return.
-G. Chadd Mason, CEO
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All performance returns are presented net-of-fees and include the reinvestment of dividends and capital gains. Benchmark comparisons are presented gross-of-fees.
Past performance may not be indicative of future returns. No current or prospective client should assume that the future performance of any specific investment or strategy will be profitable or equal to past performance levels.
All investment strategies have the potential for profit or loss. All strategies have different degrees of risk. There is no guarantee that any specific investment or strategy will be suitable or profitable for a particular client.
Historical performance results for investment indexes and/or categories typically do not show the impact of transaction and/or custodial charges or the deduction of an advisory fee, which may decrease historical performance results. There can be no assurances that a strategy will match or exceed its benchmark.
Some performance returns do not represent actual trading using client assets but were achieved through retroactive application of a model designed with the benefit of hindsight. Model returns have inherent limitations. Specifically, these returns do not represent actual trading and may not reflect the impact of material economic and market factors on the adviser’s decision-making if the adviser had actually managed the client’s money during this time frame.
Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark.
Cabana LLC manages assets on multiple custodial platforms. Performance results may vary based upon differences in associated costs and asset availability within the Cabana Model.