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 30, 2018 and is presented net of maximum advisory fees and commissions (2%).
The Cabana Portfolios were mixed for the week, all remaining essentially flat for the second straight week. The big selloff in technology stock late last week resulted in a nearly 2% drop for the S&P 500, wiping out gains from earlier in the week. The Nasdaq was down more than 3% for the week. As such, I am pleased to simply be treading water.
The 10-year Treasury note is creeping back up to 3%, thereby steepening the yield curve and evidencing demand-side growth expectations. With the exception of big technology stocks like Facebook, we continue to see very strong earnings across all sectors of the economy. Today there was a bounce back in the S&P, as well as the Nasdaq. Industrial stocks and consumer cyclicals lead the way. It is good to see money moving out of technology and into other areas of the equity market. The FAANG stocks have kept this market afloat by themselves all year – and that type of narrow leadership is unsustainable. Transports are catching up to industrials, which is a good sign for all Dow theorists. July is ending on a strong note and is another reason for optimism.
I have read several articles over the past few days, from supposedly competent sources, all claiming that a 20% decline in the markets is imminent. These reports reference the drop in the tech stocks I mentioned above, as well the lofty valuations around the equity space. These are logical points, but I could find arguments just as compelling on the other side. We will take it as it comes, avoiding investing based on predictions and focus on the things that matter. We remain cautiously bullish.
Year-to-date net-of-fees performance:
ALPHA INCOME: +0.71%
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