Subscribers,

As we find our Total Portfolio Solution holding 50% cash right now waiting for better opportunities, let’s take a few minutes to reflect on current market valuations:

 

Some people might look at that and say:  “There’s been two other times in history where valuations were this high.”

Some others might say:  “There’s ONLY been two other times in history where valuations were this high.”

What a difference that one little word makes, and not to paint too grim a picture here but we should not forget how the peak in 1929 and the peak in 2000 ended.  (insert epic crash sound effect)

I don’t bring up valuations to say that an imminent crash is coming, that’s not what it means.  And remember the famous John Maynard Keynes quote:  “markets can remain irrational longer than you can remain solvent” so we won’t be front running anything here.  This may last a while longer.

We’ll remain nimble and certainly be ready to move to safety positions on a one day notice, but we don’t front run the markets.  We’ll continue to go where the data points.

But valuations matter a lot when trying to estimate forward return.  The lower the starting point, the higher the expected return will be, and vice versa.


Given where we are now in the high 90’s percentile, it’s hard to imagine the average investor being pleased with their forward performance.  With stocks at all time highs, and interest rates at all time lows, we’re going to need some out of the box investing to be successful.  Thank you all for joining me on this journey.

 

Current VTS Total Portfolio Solution Allocations

25% VTS Tactical Volatility Strategy

50% VTS Tactical Balanced Strategy

25% VTS Iron Condor Strategy

VTS Conservative Vol Strategy  –  Optional replacement for lower risk tolerance investors

 

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