Sometimes blog posts come easily and sometimes they do not.  Over the summer, I seem to struggle with things to write about plus market volatility tends to pick up, which keeps me busier managing money. 

Remember this when you are taking your vacation.  Think of me as I am lugging my laptop wherever I go because Mr. (or Mrs.) Market never seems to take any time off.  It's a good thing I love this stuff!

First up in this special blog addition is a couple market updates.  Let's start with equities and then move to fixed income (i.e., bonds).

Here is the situation with equities:

We have a rising trend.  A recent stairstep down and elevator up correction may not be the end of the volatility though.  Expect some volatility in the period leading up to the election maybe as early as September.

Once the election is decided and the loser taken their shot at the fairness of the election, we should see favorable seasonality into the end of the year and possibly into early 2025.

​​My guess is that 2025 is no picnic for whoever wins in November.  

We have weakening economic conditions and rising unemployment levels as big and small companies continue to shed jobs.  On the flip side, we still have strong liquidity from past government programs, a Federal Reserve that looks ready to start easing interest rates and a recent history of magically being able to kick the can down the road.

My guess is a mild bear market in 2025 with equities struggling and bonds doing better, especially on the short to intermediate side of the equation.  In fact, in years where interest rates decline, this has been the time to own bonds historically as falling yields move inversely to rising bond prices.

You may be saying, but Jeff, you said that about 2024.  That is true, but this is not easy, and my crystal ball is about as good as yours.  We generally try to work with what the market gives us.  We have an opinion on the future (like above), but only move as the market confirms such opinions.  You know, it is a process!

​This is the Federal Reserve Dot Plot or where they think the Fed Funds interest rate is heading.  In case you cannot tell, follow the orange line and/or the blue dots.  
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​​Next Up, Let's move onto some good news for those affected by Hurricane Debbie.  Your kind, much gentler IRS has granted you a series of filing and payment extensions.

Of course, at the same time they are hiring more auditors to make your lives, I mean the lives of the rich, more miserable.

Here is the skinny: 

Finally, a few financial lessons that I learned over time, but wish I would have put into practice a bit earlier.  You know a few thoughts from my younger me.

1. Start Saving Early: Begin saving and investing as soon as possible. Even small contributions can grow significantly over time due to compound interest. The earlier you start, the better.
2. Create a Budget: Establish a budget to track your income and expenses. Knowing where your money goes helps you make informed decisions and avoid overspending.
3. Avoid Debt: Debt can be a financial burden. Whenever possible, use cash, debit cards, or prepaid cards instead of credit cards. Prioritize paying off high-interest debts promptly.
4. Invest in Financial Education: Learn about personal finance, investments, and money management. Knowledge is power, and understanding financial concepts will empower you to make informed choices.
5. Pay Yourself First: Before paying bills or spending on discretionary items, allocate a portion of your income to savings or investments. Treat your future self as a priority.
6. Live Within Your Means: Avoid lifestyle inflation. As your income grows, resist the urge to increase your spending proportionally. Save the extra income instead.
7. Emergency Fund: Build an emergency fund equivalent to at least three to six months’ worth of living expenses. It provides a safety net during unexpected situations.
8. Invest Wisely: Diversify your investments across different asset classes (stocks, bonds, real estate, etc.). Consider low-cost index funds and long-term strategies.
9. Prioritize Retirement Savings: Contribute to retirement accounts like a 401(k) or IRA. Take advantage of employer matching contributions—it’s essentially free money.
10. Focus on Experiences: While material possessions are nice, prioritize experiences over things. Travel, learn, and create memories—these enrich your life more than possessions ever will.

​Remember, financial planning is a lifelong journey. Start early, stay informed, and adapt as needed. 

I know I am preaching to the choir with most of you, but maybe someone you know could benefit from these ten financial lessons that I preach every day to my girls and Godchildren.

Can we help you with your investments or planning? 

Or why not get a Free Second Opinion on your planning? 

​Just contact us.

I finally got around to putting out a new blog post, I must say I struggled to come up with just the right topic that would both interest me and our readers.  I wanted to do a financial planning related post, but over the weekend I changed my mind. I was drawn to a video debate between Macro specialist Raoul Pal of Real Vision and Peter Schiff of Euro Pacific Asset Management.

This rather long video is posted, below. I thought the discussion was so important for investors over the next 6+ years that I would make it part of my discussion and forecast on what is coming in this very strange time in our country and economic future.  
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​In case you don't have 3 hours to spend watching this video, let me give you the highlights.

The primary topic of this discussion was Bitcoin and its role in the current economic landscape. Let’s delve into some key points from their debate:
​

1. Bitcoin’s Role: Raoul Pal views Bitcoin as a solution to the challenges posed by inflation and currency debasement. He praises its scarcity and network effects as valuable attributes.
2. Skepticism from Peter Schiff: On the other hand, Peter Schiff expresses skepticism towards Bitcoin, citing its lack of intrinsic value. He questions whether it can truly serve as a reliable store of wealth.
3. Blockchain Technology and Stablecoins: The conversation also touches on the potential of blockchain technology for tokenizing assets and creating stablecoins.  Here again, Raoul Pal is constructive.  Peter Schiff is skeptical, especially of stablecoins.
4. Economic Landscape: They discuss the impact of debt, the economy, and the fear of worst-case scenarios.  Specifically, both men agree that we are pretty much screwed, but that the politicians will continue to do what they do best and that is kick the can down the road with more currency debasement and the Federal Reserve with more purchases of the related debt generated from that deficit spending.  They will try to mask the related inflation through yield curve controls and other means, but there will be inflation and it may become hyperinflation eventually.  
5. The Case for Crypto: Raoul Pal makes the case that the reason they will continue to print is that the Baby Boomers have all the assets.  If asset prices go down, this will kill the Baby Boomers and create a big problem for society.   He further makes the case that we had a very similar issue at the end of World War II with large debt relative to GDP and we worked our way out via productivity and savings gains.  He believes AI (i.e., artificial intelligence) will provide the productivity gains this time around.  Peter Schiff was not quite so sure and argued that the demographics and debt levels are quite different this time around from the period in history.
6. Crypto is the Only Option: Interestingly Raoul Pal believes the only assets that will outpace inflation will be technology stocks and crypto.  Crypto he believes has the best historical returns and therefore is the Big Opportunity for investors over the next 6 plus years to make big returns before the structure changes.  Specifically, Raoul Pal believes 2030 is when things change. 
7. Bitcoin Price Prediction: While Raoul Pal sees the potential for Bitcoin to reach $1 million, Schiff remains cautious and more constructive on gold and silver as a store of value.

So now let me put in my 2 cents. 

First, I am in agreement with both Raoul Pal and Peter Schiff that politicians will continue to print currency and tax us as a way of kicking the can down the road on the United States rapidly growing debt problem and poor demographics.  They will always do what is easy and gets them reelected.  Printing, spending and then taxing us is the easy path vs. austerity measures to fix our debt to GDP imbalance.

Second, I believe Bitcoin and Crypto are part of the solution, but not "the solution."  Why?  a) Bitcoin is correlated to the equity markets and is a very volatile asset type.  Pushing all your chips into this pile will definitely cause you some sleepless nights.  b) There is governmental risk here.  Any day we could wake up and the government has either outlawed crypto or mandated a conversion to a newly issued Central Bank Digital Coin (or CBDC); and finally, c) I still believe diversification has value and crypto is not a very large, or liquid market.

Third, I would make the case that 2030 is an important year in Raoul Pal's mind, even if he never explained why.  Allow me to speculate, it is the year that the World Economic Forums (WEF) 2030 Agenda is supposed to be in place.  This could mean a new economic system is in place by 2030 that changes/saves the developed world from a new universal problem with debt relative to GDP and poor demographics.

In case you are not familiar with the WEF 2030 agenda, here are the highlights:

1. Climate Action and CO-topia:
   • By 2030, they aim to win the fight against climate change. Imagine a world where CO2 emissions are significantly reduced, the air is cleaner, and nature is recovering.
   • In this vision, cities are green and live able. Private cars are banned, replaced by efficient mobility services. Electricity is entirely green, and single-use plastics are a thing of the past. Citizens have more free time and better quality products.
2. Reducing Violent Crime:
   • Over the next decade, they believe there is an opportunity to dramatically reduce violent crime.
   • To achieve this, they need the same energy and dedication that eradicated killers like smallpox.
   • Understanding how violence is distributed in time and space is crucial. By addressing lethal violence, society can halve most forms of violence by 2030.
3. UN’s 17-Step Plan:
   • The United Nations has resolved to end poverty and hunger everywhere by 2030.
   • Their agenda includes combating inequalities, building peaceful and inclusive societies, and promoting human rights and gender equality.

You can click on any of the links for more information.

Here are my thoughts on this WEF 2030 Agenda.  Basically, the WEF is composed a who's who of global leaders that think they know better than us or any individual government what is best for us and them.  It is the "them" part that worries me the most.

The above agenda sounds great in a vacuum, but the primary purpose of this agenda is the separate the elite from the serf (i.e., you and me) and make us subservient to the corporate elite.  The result will be a highly advanced, AI based society where every move you make, financially or otherwise, is scrutinized.  Every word or deed out of line with the thoughts of the elite will be penalized (i.e., social credit scoring).

My belief is that by 2030 a CBDC or series of CBDCs will be rolled out globally.  These CBDCs may not be universally utilized, as is now the case in China, but the infrastructure will be there.  Given that the backbone of the CBDCs will be blockchain based all activity will be captured, stored and reviewed using AI.  The only thing missing will be an event, a crisis pushing everyone into CBDC or the global system.  This I believe is the change that Raoul Pal sees in our future but was unwilling to speculate on it as I have done.

So why do I present this video, agenda and hypothesis to you? 

The answer is simple and that is so you can take advantage of what is available today to create wealth and provide yourself a greater runway to operate in a possible new financial system to come.  Further as a Christian believer, it is a bit of a warning as the Christian Bible talks about such a time where there is both a one world currency and a one world leader.  No one knows the timing on this stuff, but I can certainly see the seeds of what is potentially coming.

So now how do you prosper in the next six plus years to come?  

Here is my take:

1. You must have crypto in your portfolio.  Raoul Pal is correct it has generated and may yet continue to generate returns well in excess of inflation, which I expect the latter will likely increase significantly through 2030.
2. Unlike Raoul Pal, I do not believe in this as a sole investment option.  There are just too many risks.  So, I would augment crypto with gold, silver, commodities and other hard assets that will also go up in value with inflation and possibly by more than that inflation rate.
3. Equities have historically prospered in a hyperinflationary environment.  Those that produce significant free cash flows have historically done the best, while those negatively impacted by higher borrowing costs via higher rates have suffered.  That has become technology to a large extent, and they will certainly benefit from AI.
4. You must get out of debt.  The bible says the borrower is servant to the lender.  That will become increasingly true as we move into the latter half of the decade.
5. You must own assets.  Just earning a good wage will not allow you to stay ahead of rising costs.  If you are not saving today, now is the time to get started.
6. Finally, I do not believe this will be a smooth ride.  The ability to have both passive or buy and hold assets and those that are traded out of significant declines (i.e., active investment management) for the markets or crypto will be an advantage.  Again, it's about being diversified by both the assets you hold and the way they are managed. 

Where can we help?  We can help you with all of the above as well as financial planning.  Want to start a conversation, click here to contact us.

​It’s the end of summer, what can I say.  My vacation is upon me, I am tired and ready for some rest.  The result is a Miscellany of short updates where my mind would not allow me to put together a well thought out blog post.  Bad mind!  Get some rest!

​I know these to phrases no longer go together (high yields and cash).  However, in our endless search for yield for clients, we did discover that the crypto space is paying yields up to 8.8% on stable coins, their version of cash.  In today’s world that is a great yield!

​Yes, it is still a bit of the wild west, but one of my favorite Macro investors, Raoul Pal of Real Vision, believes the crypto space will increase by 500X over the next decade.  If that is the case, can you really afford to ignore the space and the higher yields?
 
We believe that the real opportunity here is for the blockchain leaders to pair with governments around the world to rollout digital versions of their currencies.  We can already see this happening and believe in ten years; this space will be looked at like the internet is today, something we all take for granted but made some very wealthy.
 
We can’t easily access crypto or the higher yields on traditional custody platforms today, but if this is something you would like to explore, let’s talk further about it?  I have already done it myself.

​If there is any indicator I can think of that is pointing to the end of the world or at least a market crash it is the Hoosier Football Indicator.  My beloved Hoosiers are ranked for the first time since 1969 in the AP pole.  I said ranked, not rank.  The latter is what they have been the last 50+ years.

If history is any guide, they will fall flat on their faces and underwhelm even their harshest critics. 

​I also believe the fact that they are ranked must be some indication of a Bizzarro world, like on Seinfeld, where good is bad and bad is good.  This can only mean negative things in my estimation for the markets and our economy.  Run for the hills!!

​I have now been managing money for 27 years!  Glad I started when I was 5 years old! 
 
The last twelve years have pretty much been like the weather here in Tampa, the same as yesterday and the day before.  Hot with a chance of afternoon thunderstorms.
 
There is a famous saying that many have uttered and that is “this time it is different.”  Usually before they can finish with the last word of that phrase, they are proven wrong and the markets, economy or just about anything prove that “no – it is not different this time.” 
 
However, this time is different.  You know why!  If you said, all the asset purchases, stimulus, and spending bills.  Give the man a dollar (now worth 1 cent in 1925 dollars due to inflation).

​As you can see from the Buffet Indicator, market wise things are very, very and very expensive by historical standards, but where the government and the Fed are essentially the market, it can go as high as other nations will allow it before we lose the right to print our own currency (i.e., the right to be the reserve currency).  We will lose this right someday, but for now roll them presses!
 
By the way, it would be easy to get nervous about the markets, hide and never make the returns you should make.  This is a great time to have an advisor as we typically have processes that keep us invested and you making money up until the bitter end when we all try to hit the exit at once.

(Tampa, FL) InTrust Advisors, Inc. is pleased to announce Keith Hruby, MSF, AAMS® as the newest member of our team.
 
According to Jeff Diercks, the Founder and Managing Director of InTrust Advisors, "Keith brings valuable experience having served affluent families across the country.  Keith brings a comprehensive understanding of tax and investment planning and how they relate to developing a holistic, effective financial plan."
 
Mr. Diercks said further that "Keith has 10 years of experience working with affluent families and business owners providing specialized counseling in the areas of cash flow management, retirement planning, stock options and employee benefits, insurance, investments, income taxation and charitable planning."
 
Keith began his career as a commissioned officer in nuclear submarines following his graduation from the United States Naval Academy.  His military tours took him all over the world, including two deployments to the Western Pacific, a tour in Naples, Italy on the staff of the Commander, U.S. SIXTH Fleet, and a tour in Yokosuka, Japan on the staff of Commander, U.S. SEVENTH Fleet.  He later was recalled to active duty to teach Finance and Economics at the U.S. Naval Academy, his Alma Mater.  Keith was a Financial Advisor with Raymond James prior to joining InTrust Advisors.
 
Keith’s unique skill set will enhance firm initiatives in helping clients maximize after-tax income through wise tax and investment planning.  His passion is structuring charitable giving in order to minimize taxation of assets and maximize the impact to non-profit organizations.

InTrust Advisors is a boutique multi-family office located in Tampa, Florida that works to remove the burden of planning and day-to-day management of complex tax, investment and estate structures for high net worth families nationally.

​Just a few weeks ago, the headline risk was all negative.  The narrative was that Covid-19 was spreading throughout the world in a second wave.  Countries were closing down again.  Would the U.S. be next to close down like in early 2020 and it was rumored this would most likely happen with a Biden win?
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Speaking of the Presidential Election, the main-stream media did a pretty good job of fear mongering regarding that election.  What if Trump won?  Would there be rioting in the streets and general unrest?  The narrative went that such unrest could be very negative for your portfolio and for America!
 
Turns out the Trump has not won (at least not yet as he pursues legal action in various swing states).  Instead, Joe Biden appears to be the overwhelming favorite to assume the role of President come January.
 
Then recently, Pfizer announces a possible vaccine for Covid-19 with 90% effectiveness. Stocks of course are rallying like there is no tomorrow on the news and breaking to fresh highs clearing technical hurdles that just a few days ago we thought might lead to a market reversal.  

​The cynic in me wonders if Pfizer had a possible vaccine prior to the election but waited until Biden’s win to announce the trial effectiveness, but I digress.  Maybe it’s just me, but it seems the good news is now coming in batches.
 
No matter the reason, my point here is that the market will do what it wants.  It is an untamed animal that requires it be followed, not forecast. 
 
Why Forecasting Doesn’t Work?
 
Have you noticed how many guests on CNBC are clamoring to give their market forecast?  The reason is that it cost them nothing to do so, but if they are lucky enough to get it right, it could change their standing forever.
 
As I think back over time, I can remember a CNBC guest named Elaine Garzarelli.  She was credited with calling the bottom of the 1982 and 1984 Bear Markets and the top of the 2000 Bull Market.  However, where is she today?  I don’t even know.  You rarely see her anymore on any news channel.  I can tell you it’s pretty hard to get the calls consistently right or we would hear more from or about her.
 
The constant flow of news and changing market conditions is what makes forecasting markets so tough.  As an example, we have been using a service called Hedgeye to provide us fundamental data on global economies and the markets.  The founder of this group is a pretty brash guy named Keith McCullough.
 
He and his group are constantly updating their subscribers on the economic quad that they believe the data is telling them that we are entering.  Mr. McCullough bad mouths the Old Wall and investors who see the markets differently.   ​

​However, like Elaine Garzarelli before him, the constant change in the market narrative, the amount of market control now exercised by global Central Banks and the monetary policy (stimulus) that governments keep implementing has made their forecasts all but worthless.  We recently cancelled our agreement with them as a result.
 
The Key to Success
 
We continue to believe the key to success is to follow the market until it tells you the trend is reversing.  We call this Trend Following and it is something that is built into every portfolio we run. 

It is not perfect, and we usually give up some upside and give back some profits waiting on the signals.  However, it is a discipline and allows us to stay focused on the trend and not the short-term noise.
 
We like it for a number of reasons:

1. We are not just buying and holding through everything, which I believe may be a disaster over the next decade;
2. We have specific models that help put some science in the art of investing and give us a clear process where most managers have a very limited Macro process:
3. It works whether a market is trending up or down; and
4. We can use those models to help us determine how much exposure we should have to the markets.

This latter point I believe is one of the most important.  When the election approached, our models had us reduce exposure, which is good money management.  However, those same models did not have us out of the market.
 
Now that the market is rallying again, we are participating in the rally and not sitting on the sidelines.  Had some of the doom and gloom occurred that we mentioned previously, we would have limited downside risk. 
 
We may now be underperforming on the upside as we look for the right time to possibly add back some exposure, but we did what our clients pay us to do and that is to “manage risk” first and foremost and generate positive returns as a secondary goal.
 
Maybe our process could help you?  If so, please click here for a free consultation.