Hi Do, Here are Todd’s latest fun picks to take your financial skills to the next level... I have two valuable resources for you today...
But first, I want to update you with how "epochal change" is progressing...
For newer subscribers (or a quick reminder to long-term subscribers), epochal change is defined as the structural change in the economic regime that began late 2021 and will persist for 10-15 years requiring alternative investment strategies to manage risk and prosper. It's structural in nature (not cyclical), causing lots of volatility in investment returns in both directions - both bull and bear markets - but the net effect is conventional passive investment strategy should produce little-to-no growth for the next 10-15 years net of inflation.
Well... it appears this little rise in stocks for the past year has mislead some people into believing the problem went away. They incorrectly perceive rising stock prices as a return to the old epoch, business as usual, the good times are here again.
Sorry. It doesn't work that way.
Just because stocks put in a strong performance for the past year and recovered most of the losses from 2022 means little in terms of epochal change.
Please remember that bonds, as measured by the TLT (long duration Treasury bond ETF), continue pushing downward to new lows with a decline greater than 50% from when I first announced epochal change. That's a spectacular decline for the bond market... and still continuing.
Not only that, but the rising bond-stock correlation has thrown a monkey wrench in conventional diversification risk management.
Of course, that means smart investment strategy changed with all of these developments (exactly as explained two years ago). My recommended solution since this new epoch began is here, and I haven't changed my tune. It's working according to plan since first promoted on these pages back in 2021, and it's still the smart choice going forward.
To repeat, the problem with conventional passive asset allocation is that it will endure tremendous volatility over the next 10-15 years with little-to-no gains net of inflation. You need a better solution because 10-15 years is too long to endure without real profit. It messes up retirement plans, safe withdrawal rates, and much more. You need to solve the problem.
The only other interesting market development of note in recent months has been the rise in oil prices. It's important.
I told you back in early 2022 when teaching how epochal change would work that structural problems in the energy markets were a key component. Energy market problems mean that any time prosperity gets a foothold, you'll see the oil markets jump in response, creating new inflation worries, which would then put a lid on economic growth and asset prices.
And now, of course, that's exactly what you're seeing in the markets in recent months.
The government liquidity flood that fueled the asset price growth in recent months while stabilizing the banking problems also created sufficient prosperity to drive rising energy prices and renewed inflation concerns. It's a vicious loop, but it shouldn't surprise you if you've been reading this newsletter since 2021. It's baked into the epochal change cake, exactly as explained over the past two years.
'Nuff said... below are this month's educational resources to further your investment knowledge... My top resource last month showed how the stock-bond correlation can move considerably over time, which massively impacts optimal portfolio construction. This matters a lot to conventional asset allocation, which relies on stock/bond non-correlation for risk management. This month's resource shows conclusively how inflation above 4% produces positive stock-bond correlation - not good if you're applying conventional asset allocation and conventional diversification as the risk management strategy in your portfolio. My recommended solution to implement improved risk management during this new investment epoch when stocks and bonds correlate is here... Louis always provides interesting global insights as a French born, U.S. educated, macro investor who cut his teeth working in Hong Kong and now lives in Canada. His insights bring you up to date on many recent developments in this ongoing epochal change. He even goes so far as to talk specifically about regime change in the interview. I hope you get great value from this resource.
Onward and upward!
Todd Tresidder
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This investment software solution includes two of Todd's top investment systems. You'll learn the smart, proven way to manage portfolio risk during epochal change. Once you understand it, you'll wonder why you tolerated the unmanaged risk in your old "buy and hold" investment strategy. -
My Expectancy Wealth Planning group coaching program shows you how to maximize the expected growth of your wealth in every market condition regardless of epochal change. My students were prospering during the good times, and they're still prospering during this adversity. Join this smart community of active wealth builders to secure your financial future.
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