Tag Archives: market update

Second Quarter Economic Update

2016 Economic Update

Financial Markets Review by Mark:

First Quarter 2016 Review –
What a wild first quarter! After the stock and corporate bond markets had one of the steepest sell-offs during the first 7 weeks of the year (and the S&P 500 was down over 10%), the markets rebounded to end the quarter virtually unchanged for the year. As frustrating and scary as this was, Optivest clients were aided by our defensive start, purchases on dips and continued advances on our REIT holdings, which collectively resulted in one of our best quarters ever.

U.S. Economy –
The year started off with one of the biggest “false alarm” market scares in years. Worries increased about global slowing/recession, deflation, Chinese devaluation, falling profits, excessive emerging market debt and corporate defaults due to cheap oil. The usual “safe haven” investments – gold, U.S. Treasuries and Swiss Franc – rallied, gaining momentum born from fear. Finally, oil appeared to bounce at about $28/barrel enticing “bottom fishers” who first gave the equity and commodity markets a push, then a retest of the bottom, followed by a 7 week rally ending right back where they started the year. “Safe haven” price gains have held while all of the worries remain, indicating future volatility.
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Economic Insights from Tiger 21

Tiger 21 Economic Insights

Insights from Tiger 21 Conference

Dear Investor: I recently attended my second annual Tiger 21 conference where some of the biggest names in the investment world shared insights alongside 379 private investors of Tiger 21 (whose collective worth is over $40 billion). I wanted to share some valuable takeaways from the headliner speakers with you:

Thomas J. Barrack, Executive Chairman of Colony Capital, Inc. (the third largest private real estate equity fund in the world), arguably one of the country’s greatest real estate investors spoke on current real estate trends:

  • Barrack compared real estate to a slow moving train with large, long cycle moves
  • He reminded the audience that real estate is forgiving, but debt is not
  • The most important aspect of any project is free cash flow and understanding how to change the use of property to create more cash flow
  • He went on to say that the best class A building sitting on Market St. and Main St. in a large city with a AAA tenant has only one way to go – down. It cannot get better so therefore, it can only get worse
  • Barrack also held that credit today is still fairly tight with conservative LTVs, and that supply and demand are roughly in balance. Thus he did not believe that we are in a “bubble” real estate market
  • When asked what advice he would give a young professional he said, “Be able to elegantly withstand pain, work harder, learn more and be prepared and ready to take risks when the right deal comes along”

David Bonderman, Founding Partner of TPG Captial (one of the largest private equity firms in the world), listed by Forbes 400 as one of the 170 wealthiest Americans spoke about today’s economy…  Continue reading →

First Quarter 2016 Economic Forecast

Optivest Economic Update

Financial Markets Review by Mark:

2015 Economic Review –
World markets have been caught between two strong forces: 1. the Federal Reserve’s desire to increase interest rates as a result of an improving U.S. job market, and 2. weakening economies in the rest of the world as a result of China’s deceleration, bringing commodity prices to multi-year lows. The result produced a volatile tug-of-war causing U.S. markets to deliver the worst year since 2008 after dealing with a soaring U.S. Dollar, sinking junk bonds, low yields and crashing oil prices.

Outside of the F.A.N.G.s (Facebook, Amazon, Netflix, and Google), U.S. stocks struggled all year, commodities and emerging markets dropped in sync, liquid alternatives faltered (average hedge fund was down 3%), and old European markets advanced thanks to a devalued Euro and heavy Central Bank stimulus. Interest rates rose, leaving most bond funds with either small gains or losses (including income). 2015 was quite a frustrating year for investors as there were few winners and multiple losing asset classes. Continue reading →

Yes, Virginia, Valuations Matter

September 9, 2015 Market Update

Overview: Optivest sold their U.S. stock holdings before the August 24th major market decline based on over-valuation and market deterioration. This is only the third time since 1987 that Optivest has de-risked portfolios to this extent. The below report explains our rationale and our future forecast.

Great returns come from great opportunities; weak returns come from weak opportunities. Specifically, forward multi-year stock market returns are directly linked to how over-valued or under-valued shares are when you buy them… READ MORE

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