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Ho, ho, ho happy holidays! As we usher in December, we wish you the very best for the holiday season! With calls and meetings recently, we observe quite a bit of anxiety, hesitation, and concern about the economy and markets to the point that many seem to be frozen. This is something that we are experiencing first hand that doesn’t seem to be reflected in the media narrative. We realize this isn’t a jolly sentiment to open things up, but we are here to be real as we believe that is how we achieve the best investment results. We’re here to assure you that we’ve got this – we are hearing stories of individuals whose portfolios are substantially in negative territory, and that isn’t true for our clients. This is purely a product of research, vetting investments, and active and tactical management. To our clients, thank you for also being empowered about investment decisions, and recently the rounds of calls about big name tech investments – hold, trim, or sell? Your financial know how is important to us so you understand what you have and why. We also know every investor has their own unique preferences, we salute that in you and that is why we are here as a boutique firm – customization. Here's a brief market overview and then on to some cool things. Fed Chair Powell has signaled that at the December 13-14 meeting, rates will be raised 50 bps versus 75 bps. Powell cites “signs of progress” with inflation but exercises caution because the Fed doesn’t want to have to “cut rates anytime soon” he stated, and that the Fed target rate of inflation remains 2%. The rally in the stock market immediately following Powell’s remarks some believe has ushered in the next bull market. We hate to be the Grinch but we think not so fast. The Fed will need to see that inflation continues to go down without extracting energy and food prices, there are also fundamental flaws we continue to believe are problematic until remedied. We’d love to hop up and down for a bull market but don’t feel that is in service to you. The yield curve is at an extreme point of inversion which usually means recession, and the analysts we trust vary in opinion from “rolling recession” to “we haven’t hit the bottom” to as Goldman Sachs stated, “there’s more of a slowdown to come in the next 12 months that the market hasn’t priced in.” Controversies. Demonstrations in China against draconian practices and Apple complicit in the police state. I talked with two longtime China business experts who feel strongly that the younger generations in China won’t allow the draconian theme to continue. They say only 20% of the population in China are communists (from an on-the-ground perspective), the rest want democracy and certainly this is anything but currently. Pre Covid-19 and the Chinese government stepping in against companies like Alibaba, Chinese investments looked promising. The entire China story to us is a wait and see now. Will legislative action stave off the rail strike which would hurt the economy? We’ll see what the Senate has to say, and if that works. Consumer confidence – we are still looking at lower numbers despite the fact retail sales for Black Friday were better than expected. There remains a slowdown in the housing market. Our base case. We’d love to be optimistic but we are cautious and don’t necessarily believe we’ve seen the end of pullbacks. Have we solved the energy problem by releasing emergency reserves and cozying up to the US’s most hostile enemies? Drilling in Venezuela instead of doing it the cleanest way possible as the US does? The more the US has to rely on other countries for fundamental needs we see geopolitical financial risk. The job market – layoffs continue and many firms are cutting back hours significantly in lieu of terminating positions. As top Schwab analysts state, there are “cracks beneath the surface of the economy.” With that load of fun, what do we see as the investment plays? We continue to believe plays on volatility make sense until we confirm we’ve seen a market bottom and that we’ve dealt with fundamental flaws. The options range from managed futures to options to dividend strategies, and US Treasuries and the Schwab Money Market fund yielding 3.7% currently for conservative investors or to maintain principal to some extent through the volatility. We’ll shift this once we see confirmation we’re out of the woods. The cool news is a talk President of Lion’s Eye Wealth, Lisa Durant, did in partnership with the Telluride Foundation on Giving Tuesday for nonprofits and donors about how to increase donations, participation, and how to go about tax optimized giving. If you’d like information on what was covered, please email Lisa directly. The next podcast and interview will be with a separately managed account partner, ZEGA Financial, who offers options strategies with buffers to protect the downside and a new dividend strategy with a minimum investment of $250,000. Both are ways to navigate volatility. If you’ve missed podcasts or videos, you can find them at
the links below. We hope that Santa Claus brings a bull market, one can only hope! We are thankful for your trust in us, investing is personal to us and with our undeniably competitive spirit, we are here to deliver for you and hold ourselves accountable. We wish you and yours the very best for the holidays! The very best of the season to you! Lion’s Eye Wealth
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