Video Transcript:
Hello everyone. Brent Chavez, Aequitas Equitas Investment Group. We’re just duking it out with the markets over here in the war room. We want to let you know that we are staying on top of what’s happening in the economy in the markets, and we’re trying to do our best to navigate through this for all of you.
We appreciate all of you as our clients and we really want to try to make the best possible decision with your portfolio’s at this time. We’re still very heavy into cash for most of you: upwards of 40% cash, 10% treasuries, and then 10% utilities. For most of you, about 60% of your portfolio is still very defensive. Some of you, because of age, are going to be different or income needs would have a different portfolio build, but overall, that’s where we stand for most of you.
So, I just want to update you. Monday was a brutal day. Last week, it looked like we were going to get some sideways action that, at least in the markets, technicals had cleaned up. As I said on a video, we had kind of dipped our toes into the water with some stocks that really had shown some real relative strength – they held up the best during that 14-day down period that we saw… so, we added a little bit of that to our portfolios.
So, we’re going to update you today. It’s Tuesday. What has happened?
We see the S&P 500 down year-to-date, in the purple, 16%, and the Dow Jones Industrial, in the blue, is down 17%. Most of our portfolios are down less than 3% year-to-date – so, what we’re doing is good. That is as good as anyone could expect in these conditions and we’re going to continue to try to manage so that we can make the best decisions moving forward.
A couple things that we’re looking at, again yesterday, we saw that ugly day down. Why? OPEC and Russia got into an oil war… ugly for the markets… ugly for a lot of portfolios… but good for the consumer overall. You know we have to look at the light at the end of the tunnel. We’re going to get much lower gas prices here moving forward. We’re going to get lower heating oil bills and a lot of things we’re consuming are going to be cheaper because of that. So let’s take the good with the bad and remember that there’s always going to be an opportunity for us moving forward, to find ways to hopefully make some money for all of you.
We’re going to look at some things that we’re looking at for global health. Emerging markets for one and the price of copper. We’re looking at many other things, but I just want to highlight two of the things we’re looking at in this video.
Here’s emerging markets.
Interesting story about emerging markets. Emerging markets, you would think would be down maybe 25 or 30% year-to-date. Again, these are countries that are undeveloped with very small economies, very small companies – only down 15.6% year-to-date. That is one of the things we looked at last week as to why we were dipping our toes in because the relative strength in emerging markets showed in the face of a very ugly and brutal sell off – held up very well. We’re seeing it up a percent and a half or so, responding very well today.
Overall we are seeing the markets up, which is good. And we’re seeing also bond yields go up and bond prices go down. So that’s good. We want to see that. When we’re seeing green in the stock market, we want to see bonds going the other way. We want to see those yields rising… we want to see the prices falling. That’s good action that we want to see. That’s healthy action.
And then the other chart we’re going to share with you, the last chart, is the price of copper.
We’re looking at copper because copper will hopefully give us some type of indicator as to global activity and global consumption. And that is something that’s held up very well through this panic selling that we’ve seen around the globe. We want to see copper at about $2.55, or higher in that range to feel really comfortable that we’re not going to see another leg down and the global economy is not going to fall off the cliff. Well, as of today, we’re at about $2.51/pound. We want to see it at about $2.55 or slightly higher. We want that to be the bottom range if we want to feel comfortable that things are going to be okay.
That’s all I have for you today folks. I hope you’re doing well. As always, we’re here for you, we’re working hard. If you have any questions or concerns, feel free to reach out, give me a call and we can talk. Talk to you all soon. Take care.
Charts are from Yahoo! Finance and Kitco.com