Market insight and a highlight of Cabana’s year-to-date performance
Cabana’s six portfolios range from “Conservative” to “Aggressive” and include an income strategy portfolio. Performance is as of market close July 3, 2017 and is presented net of advisory fees and commissions.
All portfolios were down for the week between -1.34% (Conservative) and -.32% (Alpha Income). The Conservative Portfolio underperformed despite a down market for the week as a result of the continued pullback in large tech stocks (QQQ), as well as gold (GLD) losing 2.5%. The Conservative Portfolio currently holds positions in both. These assets are typically non-correlated and it is unusual that we would see the sharp pullback in high beta assets (tech) and safe-haven assets (gold) not catch a bid. This anomaly is consistent with normal profit taking in the overbought tech sector, coupled with the strong June ISM data. Strong economic data will allow the Fed to continue to raise rates thereby boosting the Dollar. A strong Dollar is traditionally bad news for gold. A review of the monthly charts of GLD and UUP show this relationship. The Dollar pullback last week appears to be in response to Europe hinting at more hawkish policy on that side of the ocean, rather than weakness here in the U.S.
As I pointed out last week, a correction in big tech will likely bleed over into the broad equity markets, which will result in pullback, even if it is just normal and healthy profit taking after an exceptional run-up. Summer is traditionally volatile and we could start to see some selling of equities. We will not put the cart before the horse or make predictions with our portfolios, but rather respond to macro changes as they occur. Stay disciplined and enjoy the best season of the year for friends, family and fun!
Year-to-date net-of-fees performance:
GROWTH: +8.06 %
ALPHA INCOME: 3.18%
Performance is presented net of advisory fees and commissions (Conservative – Aggressive is presented net of 3% fees from January 1, 2017 – February 28, 2017 and 2% beginning March 1, 2017; Alpha Income is presented net of 2% fees)
-G. Chadd Mason, CEO
*Performance numbers indicated with (+) for positive return and (-) for negative return.
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