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:
ALPHA INCOME: +0.64%
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