FYI:
Regards,
Ted
March 24, 2016
Dear WEALTHTRACK Subscriber,
One of the most perplexing aspects of this year’s volatile market performance has been its seeming disconnect from what’s going on in the U.S. economy. The market’s dramatic early sell off doesn’t match the economy’s fairly positive fundamentals.
The team at Cornerstone Macro recently published some research that illustrates this perfectly. On the one hand, according to calculations involving variables like percentage changes in the stock market and bond yield performance, the market’s behavior is implying a better than 50% probability of recession.
On the other hand - when they look at macro variables such as inflation-adjusted incomes, energy prices and loan delinquencies the outlook is much more positive, registering only a 28% probability of recession.
The Cornerstone Macro team says historically macro variables are better than market ones at predicting actual recessions. Let’s hope that pattern holds up now!
No matter how it turns out, investors have to live with the consequences, preserve capital and hopefully grow their portfolios. This week’s guest is David Darst, a master of the art of asset allocation, a well-known strategist and WEALTHTRACK guest since the beginning.
Darst is an independent investment consultant to major financial firms and family offices. He is Founder and Member of the Asset Allocation Committee at Morgan Stanley where he was Chief Investment Strategist of the firm’s global wealth management group for many years. He is also the author of twelve books including three on asset allocation, the most recent being The Little Book that Still Saves your Assets.
I began this week’s interview by asking Darst how real he thinks the possibility of a global recession is. He’ll also share his One Investment pick for a long-term diversified portfolio, and in my Action Point I have some advice about the value of including some non-correlated assets in your portfolio.
If you can’t join us for the show on public television this week, you can always watch it on our website, WealthTrack.com over the weekend. If you’d like to watch it sooner, it’s available to our PREMIUM subscribers right now.
Thank you for watching. Have a lovely Easter weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo
