Video Transcript:

Hello everyone. Brent Chavez coming to you from my Durham, Pennsylvania home office. I just wanted to get a video out to you, a little bit overdue. We’ve had a crazy crazy eight weeks of our lives. And the markets have even been crazier. And so, just want to kind of update you on some things that are going on and what we’re thinking what we’re seeing.

First of all, on a personal note, everyone in my household is healthy and I hope everybody in your home is staying safe and healthy also. We, as you know, moved up to Durham from Upper Black Eddy six months ago, and then we had a fire on our property in a second home that we have that my son was living in. So that’s been adding to the craziness of my life. Basically rebuilding a house from the ground up and consuming a lot of time and energy.

But, more consuming has been these markets, and I probably spent more hours in front of my computer in the last eight weeks that I ever have really just looking at the data, looking at charts, listening to podcasts, listening to macro micro experts in the economy, and really just trying to get a direction a sense of where things are going. It has been very difficult to say the least. We have the obvious bad news, 30 million unemployed, the stay-at-home orders, basically a global economy shut down. But, last month we saw the markets rise up out of the ashes.

I personally didn’t buy into it and stayed very conservative through that period, not saying that was the right thing to do but the reason we had done it was the obvious global pandemic in a economy that has been shut down around the globe, in an unprecedented way that we’ve never seen – that was one thing that kept me from feeling too confident. The second thing was the data underlying. Many of the data points that drove us to go to cash back in January, were still happening in this last rise that we saw take place in the S&P, Dow Jones, and NASDAQ. A few of the big boys doing all the heavy lifting in the indexes and many non-participants. That is not a sign of a healthy economy. The regional banks not participating… the financial sector of the economy not participating… not healthy. They have to participate with rallies for anything to be sustainable. Again, we saw that back in January as an issue, coupled with the fact that 5-10-20-30 year treasuries are at historically high prices and low yields – not a sign that people are truly believing that our economy is going to get much better anytime soon. It’s saying the opposite.

So, we have just tipped her toes in with some different positions in and out of the last six weeks. So we will continue that strategy and continue to keep a very high cash position for the foreseeable future. Again, that could change if somebody comes out tomorrow and says, “hey, we have a vaccine for coronavirus,” then it probably would be a much different picture of how we would attack the markets. But for now, there’s too many open-ended questions, too many things that we just don’t know how it’s gonna play out. And I think we’re probably going to get some pullback here in in the future of a decent size pullback… how big? Who knows. Many people feel it’s not gonna happen because of the Federal Reserve’s throwing trillions of dollars into the market. But, I disagree with that. I think that can only go so far. When you’re talking a global pandemic that has shut down global economies, it’s very hard to throw money at that to make it all better. We’ve had probably about $70 trillion in lost valuations around the globe and to throw 5, 10, $15 trillion at the problem to make it all better, probably not going to work to level that people think that it will.

So again, we’re just going to continue to look at the data, sit in front of my computer and try to find what is the best moves to make moving forward. I hope this video finds you well. There are many other things that we could talk about in this video. We could talk about liquidity issues with the dollar globally and how that could affect things moving forward… we could talk about flare ups of this virus globally… we could talk about if we don’t get a vaccine. But again, I don’t want to keep you on this video for hours and hours. So, if you have any questions or concerns about how things are going in your portfolio, reach out to me I’ll get back to you as soon as possible. We are working diligently very hard. We are looking at as much data as we possibly can and we are again, not sitting here, just waiting for some green flag to say, “everything’s good.. let’s go.” We’re actively looking to manage your money on a daily, weekly, monthly basis as we always do, and continue to do that and work even harder than we have probably ever to get through this crisis.

This is a war… and wars aren’t won with a battle, they’re won with winning many battles. And in some of the battles, you lose in a war. So we’ve gotten a lot of things right and we’ve gotten some things wrong as far as how this this market has played out. But again, our goal is to make sure we continue to win the war. We may lose a battle or two along the way but we want to win the war at the end of the day and protect your assets, grow your assets.

I look forward to speaking with all of you. Please stay safe. If there’s anything that I can do for you, if you need help with anything, reach out to me and I will do my best to make sure I assist you in any way possible. Take care. Bye bye.

Brent E Chavez
bchavez@aeinvestmentsgroup.com