FYI: (I will link episode as soon as it becomes available for free, early Saturday morning.)
Regards,
Ted
April 26, 2018
Dear WEALTHTRACK Subscriber,
Up until recently protecting your portfolio from market declines seemed like an exercise in futility. Being cautious cost you. With the benefit of 20/20 hindsight we all should have been fully invested in the U.S. stock market since the March 2009 lows, at least until the end of 2017, and not worried about diversifying into other more defensive asset classes.
That notion is a pipe dream of course. Most of us were invested in the stock market going into the financial crisis. Had we been fully invested in the S&P 500 during the throes of it, between late 2007 and early 2009 we would have suffered a 54% decline. During that same tumultuous period U.S. Treasury securities rose nearly 16% and gold appreciated nearly 26%. That’s the reason financial advisors recommend portfolio diversification, to mitigate those types of losses. But how much should we diversify and into what?
This week’s guests have two different responses with one that overlaps. John Hathaway is Chairman of Tocqueville Management Corporation, a deep value-oriented investment advisory firm which manages money for institutions and high net worth individuals as well as several mutual funds. Hathaway is now co-portfolio manager of the Tocqueville Gold Fund which he has managed since its 1998 inception. Rated 4-star by Morningstar, the fund which invests in both gold and gold mining stocks has delivered 9% plus annualized returns since inception, but the fund and gold related investments have been poor and volatile performers in recent years.
Randy Swan is Founder, CEO and lead portfolio manager of Swan Global Investments, an investment advisory firm he launched in 1997 which now has more than $5 billion dollars under management in separately managed accounts and more recently several mutual funds. Its flagship Swan Defined Risk Fund, started in 2012 has earned a Bronze Medalist rating from Morningstar based on Swan’s track record of “protecting shareholders across multiple market cycles.”
Swan’s proprietary Defined Risk Strategy used in the fund has a core of equally weighted S&P 500 sector ETFs, which he then consistently sells out of the money calls and puts on to bring in a regular stream of income and protect the portfolio in down markets. During the worst year of the financial crisis the Defined Risk Strategy declined only 4.5 % versus the S&P 500’s 37% drop and a 22% decline in a 60% equity / 40% bond portfolio.
How urgent is the need for downside protection in the current market? They will respond.
As usual, this week’s program is available to our PREMIUM subscribers immediately. In our exclusive EXTRA feature Hathaway will discuss the loneliness of being a gold investor and how he copes with an unpopular asset class, and Swan will explain his decision to leave corporate America, taking a career risk to help investors better manage market risk.
Thank you spending your precious time with us. Have a lovely weekend, and make the week ahead a profitable and a productive one.
Best regards,
Consuelo
Video Clip:
M* Snapshot TGLDX:
http://www.morningstar.com/funds/xnas/tgldx/quote.htmlM* Snapshot SDRAX:
http://www.morningstar.com/funds/XNAS/SDRAX/quote.html 
