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The Week in Review: Performance updates from Cabana’s CEO – July 17, 2018

6 years ago

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Cabana’s seven portfolios range from “Conservative” to “Aggressive” and include an income strategy and an “Accumulator” portfolio. Performance below is as of market close on July 16, 2018 and is presented net of maximum advisory fees and commissions (2%).

Cabana’s Portfolios were mixed for the week. The Alpha Income Portfolio led the way with a gain of 0.19%. The Moderate and Growth Portfolios also finished positive this week. The remaining portfolios were down slightly.

U.S. equity markets regained and held important technical support in the face of almost constant headwinds in the form of political upheaval and the very real possibility of a global trade war. I will not belabor the point, but we are living in very strange times politically – especially when it comes to foreign policy. Our stock market’s ability to move forward is a real testament to the ultimate importance of earnings. I have stated many times that I believe earnings are the real driver of stock prices and ultimately the attractiveness of one asset class relative to another. The difficulty of course, is determining what issues (such as those pointed out above) will impact earnings in the future. Markets are forward-looking and constantly weigh and assess information to determine if things will get better or worse. Fortunately for us, we can let the collective wisdom of millions of smart investors throughout the world do the work for us. We need to simply monitor the price of particular assets to tell us if earnings are likely to be affected. The price of an asset will generally move before there is a change in earnings. This data, in conjunction with monitoring earnings and interest rates, gives us a fair idea of where we are in the economic cycle. This is what we attempt to do here at Cabana. If we can broadly define where we are in the cycle, we should be able to determine which types of investments are the most attractive. For now, equities still look more attractive than bonds. Commodities are being affected and prices held in-check by weakness in emerging markets – and China in particular. Real estate continues to do relatively well, even with the prospect of rising interest rates. This is the result of strong consumer demand for housing. The Dollar is strong and reflects the continued outperformance of the U.S. economy relative to the rest of the world. While the strong Dollar can make it difficult for certain assets (commodities, foreign equities and multi-national US companies), there is no denying that the U.S. is leading right now. We remain moderately bullish.

Year-to-date net-of-fees performance:

CONSERVATIVE: +0.76%

MODERATE: +0.70%

BALANCED: +0.61%

GROWTH: +0.31%

AGGRESSIVE: +0.56%

ALPHA INCOME: +0.64%

ACCUMULATOR: +0.93%

 

Disclaimers:
 

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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.

Disclaimers

January 17, 2024

This material is prepared by Cabana LLC, dba Cabana Asset Management and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This material may only be distributed in its original format and may not be altered or reproduced without the prior written consent of Cabana. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.  

“CARA” is Cabana’s Cyclical Asset Reallocation Algorithm. Scenes assigned as per the judgment of The Cabana Group. Scene names and number of scenes have changed over time in an effort to obtain efficiencies and provide clarity of investment objective. 

This material may contain ‘forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy. 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. The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal.  

Cabana LLC, dba Cabana Asset Management (“Cabana”), is an SEC registered investment adviser with offices in Fayetteville, AR and Plano, TX. The firm only transacts business in states where it is properly registered or is exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. Additional information regarding Cabana, including its fees, can be found in Cabana’s Form ADV Part 2A or Form CRS. A copy of which is available upon request or online at www.adviserinfo.sec.gov/. 

Past performance is no guarantee of future results. All investment strategies have different degrees of risk and the corresponding potential for profit or loss. Asset allocation and diversification will not necessarily improve returns and cannot eliminate the risk of investment losses. “Target Drawdown” is merely a descriptive term used to describe the general strategy and objective of the portfolio, it is not a guarantee, nor should it be construed to suggest safety or protection from loss. There is no guarantee that portfolio performance will remain consistent with the targeted drawdown parameter. While risk tolerance and targeted “drawdown” are identified on the front end for each portfolio, Cabana’s algorithm does not take any one client’s situation into account and there is no guarantee that Cabana’s strategies will be suitable for any investor. Investors and advisors should not simply rely on the name of any portfolio to determine what is suitable. It is the responsibility of investment advisors to determine what is suitable for their clients. Cabana manages assets on multiple custodial platforms. Performance results for specific investors will vary based upon differences in associated costs and asset availability.  

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Commonly used index/benchmark definitions:  

All indices and categories are unmanaged and an individual cannot invest directly in an index or category. Index returns do not include fees or expenses. Benchmark indices will likely materially differ from Cabana’s portfolio strategies. Detailed information as to how the returns are calculated can be obtained online from the following link: https://thecabanagroup.com/disclaimers/performance-reporting-methodology/. 

Morningstar’s Moderate Target Risk index  follows a moderate equity risk preference and is based on well-established asset allocation methodology from Ibbotson Associates, a Morningstar company.  

Morningstar’s Tactical Allocation category includes portfolios that seek to provide capital appreciation and income by actively shifting allocations across investments. These portfolios have material shifts across equity regions, and bond sectors on a frequent basis. 

The S&P 500 Index is a market-capitalization weighted stock market index of 500 widely held large-cap stocks often used as a proxy for the U.S. stock market.  

The Russell 2000 and 3000 indices are market-capitalization weighted stock market indices that include, respectively, 2000 and 3000 of the most widely-held stocks and are often used as proxies for the U.S. stock market. 

The Nasdaq Composite Index is a market-weight capitalization index that covers more than 3,000 stocks listed on the Nasdaq Stock Market. What is the Nasdaq Composite, and What Companies are in It? | Nasdaq