The Fed Steps In

What a wild ride since Friday! Over the weekend we heard about more cases of the virus and more deaths. On Monday (yesterday), we saw markets test the lows of Friday during the pre-market hours, then rally during a very volatile day for a big percentage gain.

This morning stocks began to weaken and began to sell of when, BANG!, the Fed announced an emergency 0.5% rate cut! Wow! But wait! After an almost instantaneous multi-percentage rally, stocks began selling off again … and again … and again… and again.

As of this writing at 1:05 PM, Central Time, the S&P-500 is down more than 3% from Friday’s close. So that’s the bad news.

The good news is that our holdings in gold and bonds are up by more than stocks are down. And the aggressive accounts are really benefiting from the rally in gold and silver.

On Friday, then on Monday, I put some of our cash back to work. Now we are 40% invested in the standard methodology, 10% in silver, and 50% in cash.

Thanks for your trust.

We are in good shape.


Ending February in Good Shape

I’ll crunch the numbers over the weekend, but as of Friday Noon, 2/28/2020, our balanced portfolio clients will finish February up nicely year to date while the S&P-600 looks like it will finish the month down about 6% or so. The aggressive portfolios are remaining aggressive (you know who you are).

It has been a wild ride for the general markets, but we avoided most of the carnage when I sold all of our SPY(S&P-500 index ETF) and half of our IYR (real estate index ETF) a couple of days before the crash. You can go back to the blog I wrote that day and see the reasons I pulled the plug.

Today, I sold the gold and the US treasuries because they have been rocketing upward until today. I think people are beginning to sell whatever they can to raise cash to cover their margin calls on stocks. If this theory is true, we may have a couple of waves of selling left to ride out, except now, everything will be sold (not just stocks).

Looking forward, we now have 75% of the portfolios in cash, 10% back into SPY, as of this morning, some real estate (IYR), and some silver (SLV). We are in great shape to ride out the storm, sitting on nice gains for the year, and plenty of “dry powder” to take advantage of lower prices and lower volatility.

I’ll make a point of sending out 2020 Year-to-date performance reports next week, so everyone can see exactly where they stand through the month of February.

Have a great weekend.


Markets are Crazy; Our Portfolios are Fine

Just wanted clients and friends to know that, while the US stock market is down about 2 3/4% at 2:30 Central Time today, our client portfolios have only dipped about 1/2 %.

Part of this is due to the diversification of the model and part is due to my decision a week ago to take some profits and reduce risk in stocks and real estate.

The timing turned out to be pretty good.

Until worries about the coronavirus’ effect on the global supply chains and the human impact begin to subside, this crash could continue.

I’ll keep everyone posted.


Gold up big. Stocks are down

Well the timing of my decision to take profits in stocks and real estate last Tuesday turned out to be fortunate. The allocations to gold and US Treasuries are up strongly, US stocks are down more than 1%, and real estate is about flat, at this writing on Friday afternoon.

Of course, this could be just another minor pullback in stocks, like all the others we’ve had the last 10 years. In fact, you could say the markets were getting ahead of themselves and this pullback is very healthy. So, I’m not making predictions. That is not our business.

Our business is investment management with a primary focus on risk management. Getting good long-term risk-adjusted returns is a worthy goal. It just doesn’t seem to me like the markets are properly pricing in the risks of the corona virus, the ever growing consumer and corporate debt, and the various political issues we face around the globe.

Have a great weekend.


Corona Virus – Managing Portfolio Risk

Well, I’ve been watching our portfolios and the US stock markets grind slowly higher. It’s been really nice. Now, I feel the time has come to take some profits off the table in SPY (S&P-500 ETF) and IYR (Cohen & Steers Realty Index ETF). Just these two positions have added approximately 2% to our total portfolio returns over the last month or two.

We are still very close to all-time highs in the US stock market, so you might ask me “Why are you doing this now? My answer is, “To be safe rather than sorry.” Yes, I know that we could miss out on further gains, but the markets seem to be ignoring the potential economic damage the quarantines and efforts to fight the virus could cause.

Since many of my clients are at or past retirement age, today, I sold all of the SPY position and half the IYR position. I will continue to watch the TLT (U.S. Treasuries ETF) and the GLD (Gold ETF) very carefully. Right now, they are both rallying strongly. If either of those asset classes shows weakness, then I’ll take profits there as well.

The “standard” very conservative portfolio allocations are still shown on the portfoliowisdom home page.



Coronavirus has an effect on the markets, but little on our portfolios

I watched with interest last week as the stock markets began to crack a little under the weight of the coronavirus news. I’ve been watching even more closely over the weekend and today (Monday, 1/27/2020).

As of this writing, the S&P-500 is down a little more than 1% since Friday’s close. Our portfolios have moved very little, due to the US treasuries and the precious metals.

I’ll keep a close watch out, but there is no cause for concern at this time.



It's December 2019!

Well, Cyber Monday is tomorrow, and I wonder if the deals will be any better than they were for Black Friday. Now that people have been “trained” to spend a lot of money during this season, I can’t help wondering if many advertised “deals” are not quite that good. Hmmm.

After trailing other asset classes most of 2019, stocks are now on top for the year. Gold, silver and the miners entered an intermediate-term downtrend last week. Accordingly, we are increasing allocations to stocks and real estate; underweighting US Treasuries and gold. This market behavior reminds me of the end of 2017 when many people were calling for a recession, but the market kept chugging upward.

As I’ve written many times before, we are not in the business of predicting the market. Our methodology simply responds to recent market behavior to manage downside risk.

Have a great December!

S&P-500 Set a New, Record High

Stocks are back in an intermediate uptrend and breaking new, higher ground. While stocks were turning around, precious metals and the miners have been consolidating after a huge jump this Summer. Real Estate has been on a tear, also setting new highs.

It seems that the financial markets are paying no attention to slowing capital expenditures, shrinking profits, larger Federal deficits, record debt of all kinds, and increasing consumer loan delinquencies. Go figure.

As a great investor once said, “The stock market can remain irrational far longer than you can remain solvent”. How does that apply to us? We can have an opinion about what should be happening, or what will happen soon. However, we allocate our portfolio based on our methodology and what the markets are doing now. Sooner or later, economic fundamentals will have their impact. Our goal is to respond to current market behavior and make money… not try to “be right”.



Precious Metals Dominate the Markets (but not the news) in August

Gold is up about 20% YTD 2019 through August 31, beating the stock indexes for the first time since probably 2011.

What is fascinating to me is that the US dollar continues to climb against other currencies. Usually, when gold rises in USD, the USD is sinking against other currencies. Not true right now. In spite of US debt, deficits, social security and medicare obligations, the USD continues to climb vs. other currencies.

And yet, gold, silver, and the miner are going up even faster. It sure looks like the bear market for gold that began in 2011 is over. Ray Dalio, of hedge fund fame, has opined that a new 10-year secular bull market in gold may be under weigh. Who am I to disagree?

Have a great September, and manage your investment risk.

Cheers. is 10 Years Old!

Thanks to our friends, customers, and investment clients for making a success. We founded Dale Beals Financial Wisdom, LLC (d/b/a PortfolioWisdom) on June 3, 2009, because there had to be a better way to treat clients than the way a typical “wire-house” (like Smith Barney or Merrill Lynch), or bank would behave.

Without going into many negatives about those business models, we set out to:

  1. Share your pain as well as your investment success by offering to reduce our fees in any year you had a net loss.
  2. Remove the financial conflict of interest by establishing a fee-only relationship instead of selling products on commission.
  3. Reduce your overall investment costs by eliminating hidden “middle-man” expenses, soft dollar agreements, and by charging reasonable advisory fees for our work.

During the last 10 years, we have developed and refined asset allocation models for both conservative and speculative clients. Those refined models are working well, and we use them to manage our own money.

We are very grateful. Thanks again.

Dale Beals