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

Quite an Interesting Week – The Fed Folds

Stocks got a nice lift when the Fed said that, all of a sudden, they were looking hard at LOWERING interest rates. Not two months ago, they were claiming the economy was great, and they would be RAISING rates twice more in 2019.

The real story is gold and the miners. They absolutely exploded right through the ceiling of $1350/oz for gold that has held for the last five years. Yes five years. Gold is finishing the week at $1404/oz.

Thankfully, we fully benefited from this move.

Have a great weekend.

Stocks Looking Dangerous

Gold and Bonds are up while Stocks are down big today. The trade war is being blamed, but there are a number of possible causes in addition to trade wars.

  1. Consumer debt has never been this high. People owe more than they did just prior to the Financial Crisis of 2008.
  2. Living costs are rising, even though the Fed says inflation is low.
  3. The US budget deficit continues to grow, and our total debt is growing at the rate of over $1 trillion per year. Actually, the last trillion dollars of debt took just 10 months to accumulate.
  4. More car loans are delinquent (more than 90 days overdue) than ever before.
  5. More credit cards are delinquent (more than 90 days overdue) than ever. I read today that 80% of American families are one missed paycheck away from serious financial trouble.
  6. And our politics! Don’t get me started.

In spite of these factors, the US Dollar seems to maintain its strength. Gold gets crushed every time the price reaches $1,350 / oz. And US stocks are still within 7% or so of all-time record highs… even after today’s selloff.

So who knows? I sure can’t predict what will happen. Is this the beginning of the big reckoning? Or just another sudden dip on the way to new highs? Time will tell.

For now, our methodology has Gold under-weighted due to its intermediate trend, and real estate under-weighted due to recently high volatility. We have roughly 9% in cash and 40% in Tips.

Have a great long weekend!

Brutal Day on Wall Street

As of this writing on Monday afternoon, the S&P500 is down approximately 2.6%. Gold is up 1%, Real Estate is flat and US Treasuries (TIPS) are up just a little.

Now that the test of top has failed, and we passed the deadline without any settlement in the trade war, pessimism rules.

Manage your risk carefully, based on your personal objectives and situation in life.


US Stocks Fail the Test of Top

Blame the trade war or blame the Fed. Whatever you blame, we’ve seen stocks nearly 4% below where they were just a week ago or so.

Every major asset class has been nicked, but stocks, coming off record highs, may be getting hit the hardest. Gold and real estate seem to have stabilized over the last couple of days.

Looking at the charts, I don’t anticipate any new signals from my methodology next week, but volatility is definitely beginning to creep back up.

Let’s stay alert!

US Stocks Holding at Record Highs Today!

My last post covered the test of previous highs for the S&P500. A few days ago, the stock market pushed above the previous highs. After the Fed’s rate decision and announcements about their interest rate policy, ALL of the major asset classes took a big hit for a couple of days. However, today, all major asset classes are back on the rise, and, at this writing, the S&P500 is right back at the record highs.

Interestingly, gold, silver and the miners all established intermediate downtrends just this week. Accordingly, I rebalanced the portfolios, reducing the gold allocation and increasing all the other asset classes. It’s nice to have the luck for all of these assets we bought Wednesday and Thursday to be up nicely today.

Have a great weekend!