Investment Thesis for 2017

At the start of last year, we released our outlook for 2016 and the picture was a bit pallid. In our blog post Four Red Flags to Watch for in 2016 we wrote, “We believe there are several indicators that are pointing to a tough and volatile year in 2016. High Yield spreads, interest rates, corporate earnings trends and technical deterioration are on our radar as hints that the market could be heading lower. Will this lead us into a bear market next year? We don’t think that is likely unless the US suffers a recession. While it doesn’t appear that we are heading for one, I also recall at the start of 2000 and 2008 market experts didn’t expect a recession or a bear market then either. I’m not looking to be right or wrong in the call…just aware and prepared.”

This year we are thinking the opposite. We could very well be in for a “blow-off top” that could propel the S&P 500 to $2600 to $2700 before entertaining the next bear market. A large part of our thinking materializes from monetary and fiscal policy trends, global economic growth, corporate earnings and technical analysis.

We believe that the US equity markets are chugging higher more on investor sentiment than underlying fundamentals. Should we get confirmation that expectations are becoming a reality then we could see the next leg higher in the stock market. This will most likely happen as the economy experiences a “sugar high” from continually accommodative monetary policy and a burst of fiscal stimulus.

Fiscal Stimulus

 The proposed infrastructure spending plans by the Trump Administration may very well be a shot in the arm for the US economy and set it on pace for more robust growth. According to a recent spending priority list of Emergency & National Security Projects, the plan is calling for an immediate $137.5 billion spending proposal that is estimated to produce 193,350 direct job years and 241,700 indirect job years.

According to the McClatchy DC web site, “The preliminary list, provided to the National Governor’s Association by the Trump transition team, offers a first glimpse at which projects around the country might get funding if Trump follows through on his campaign promise to renew America’s crumbling highways, airports, dams and bridges. The governor’s association shared that list with state officials in December. The group told the officials the projects on that list were “already being vetted.””

We are unsure if President Trump will meet his targeted 4% GDP growth in the US if the rest of the global economy remains in its current sluggish state, but certainly it is of our opinion that this type of spending plan, if done correctly could boost our economy beyond the sluggish pace during the previous administration. We reiterate that it needs to be done correctly as it seemed President Obama’s fiscal stimulus into “shovel ready” projects never really made it to the real economy but certainly boosted capital market returns. This fiscal stimulus is expected to be different as can be seen in the infrastructure trade in the stock market. Industrials, materials and those hard economy cyclical sectors have rallied hard upon the Trump election. According to recent reports, Democrats are preparing to release their own $1 trillion infrastructure spending plan in the days to come. With bipartisan support of fiscal spending (something the Republicans resisted during President Obama’s term) there is a better than average chance that spending will increase. For fiscal conservatives and limited government proponents, this is undoubtedly a hard pill to swallow but should we see economic growth confirm expectations, that would be a key driver of equities moving forward.

Other pro-growth policies such as tax cuts and deregulation are also a tail wind for equity prices. According to JP Morgan (via Business Insider), “Donald Trump’s administration , backed by a Republican majority in both houses of Congress, has unveiled a strongly pro-business, pro-growth agenda. While some initiatives, such as cutting regulations and boosting infrastructure spending, may take several years to impact the economy, the promise of tax reform has already spurred a stock market surge.

Tax cuts for businesses and households stand a strong chance of becoming law in early 2017, as procedural rules make them far easier for Congress to pass than traditional legislation. The GOP has largely coalesced around House Speaker Paul Ryan’s “Better Way” plan, a comprehensive package of reforms designed to encourage investment and promote growth.

The stock market responded to the presidential election by climbing 7 percent in the fourth quarter of 2016, creating almost $2 trillion in new wealth. This winter’s anticipatory equities surge could be followed by a boost in GDP as the implications of tax reform become clear. Nonpartisan tax economists estimate that the planned stimulus could raise GDP by as much as 1 to 1.5 percentage points.”

Stronger Economic Growth

We are seeing improvement in the US and global economic picture. Sentiment aside, there are signs that the world is emerging from years of lackluster economic growth. In the latest GDP report, the headline growth figure of 1.9% 4Q16 was weaker than expected. That said, the New Deal Democrat blog has brought to light several insights that point to stronger growth ahead. They write, “This morning's release of 4th Quarter 2016 GDP gives us our first look at several long leading indicators for 2017: proprietors' income and real private residential investment.

Let's turn first to proprietors' income.  One of the 4 long leading indicators identified by Prof. Geoffrey Moore was corporate profits.  The only problem with that is, they aren't reported until the second estimate of GDP, which we will see next month -- in other words, 2 to 5 months after the events have actually happened.  Proprietors' income almost but not quite always trends in the same direction as corporate profits, and gets reported with the first estimate, so it is more time.

In the 4th Quarter, proprietor's income (blue), which unlike corporate profits (red), never turned down in the last several years, continued to rise:”

“This tells us that domestic US businesses with little exposure to foreign exchange issues continue to improve their top lines. Now that the strong 2015 US$ has disspiated, he likelihood is that corporate profits will follow.  Needless to say, this is a positive for the next 12 months.

Now let's turn to real private residential investment.  This is the long leading indicator identified by Prof. Edward E. Leamer of UCLA in his presentation a decade ago, "Housing IS the business cycle."  The most accurate way to measure this is as a share of overall GDP.  This indicator typically turns 5 quarters before the economy as a whole turns.  This morning it was also reported to have increased:”

“Real private residential investment declined in Q2 and Q3 from its Q1 peak, and whlle Q4 turned up, we still have not made a new high.

As of the end of 2016, housing continued to give us a mixed picture.  Both single family permits and real residential construction, the two least noisy of all of the monthly housing readings, have been rising:”

The Federal Reserve Bank of New York NowCast Report now has 1Q17 GDP forecasts at 2.7% with the largest increases in growth coming from the manufacturing sector.

The improvement in the manufacturing figures have been astonishing. We blend several manufacturing reports into an aggregate reading. This aggregate combines the various manufacturing surveys from all the regional Federal Reserve banks into on easy to read model. Anything above zero represents growth. The chart below shows the movement in our model over the past several months.

On manufacturing, Scott Grannis of Calafia Beach Pundit writes, “A stronger-than-expected ISM manufacturing report helped get the stock market off to a good start for the year.”

“As the chart above shows, the ISM manufacturing index is pretty representative of strength in the broader economy. Today's December ISM report is consistent with fourth quarter GDP growth of 3-4%, and that is somewhat better than the market had been expecting. The Atlanta Fed's GDPNow forecast for the fourth quarter had been 2.5%, and today it rose to 2.9%.”

“Export orders, shown in the chart above, were usually strong in December, a good sign that overseas economic activity is picking up. It's also encouraging that export orders have strengthened even as the dollar has strengthened (normally a stronger dollar would be expected to make life more difficult for U.S. exporters). This further suggests that animal spirits are rising both here and abroad.”

“The chart above provides confirmation of this, in that it shows that manufacturing conditions in both the U.S. and the Eurozone have improved quite a bit in recent months. A synchronized strengthening of economic conditions around the world is a very welcome development.”

Industrial production and capacity utilization have improved year-over-year.

According to the American Chemistry Council, “American chemistry is essential to the U.S. economy. Chemistry’s early position in the supply chain gives the American Chemistry Council (ACC) the ability to identify emerging trends in the U.S. economy and specific sectors outside of, but closely linked to, the business of chemistry.

The Chemical Activity Barometer (CAB), the ACC’s first-of-its kind, leading macroeconomic indicator will highlight the peaks and troughs in the overall U.S. economy and illuminate potential trends in market sectors outside of chemistry. The barometer is a critical tool for evaluating the direction of the U.S. economy. The index provides a longer lead (performs better) than the National Bureau of Economic Research (NBER).”

“The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), started the year on a strong note, posting a monthly gain of 0.4 percent in January. This follows a 0.3 percent gain in December, November and October. All data is measured on a three-month moving average (3MMA). Accounting for adjustments, the CAB was up 4.6 percent over this time last year. On an unadjusted basis the CAB climbed 0.3 percent in January, following a 0.5 percent gain in December.”

Retail sales year-over-year growth has broken its downward trending pattern.

The Citigroup Economic Surprise Index has been trending up with higher highs and higher lows.

The ratio of gold to lumber prices is also indicative of stronger economic growth ahead and is a bullish sign for equities.

We are anticipating 3.1% to 3.3% US GDP growth this year. On the global economic front, we anticipate Japan and Europe growing 1.5% to 1.7% this year and China to post 6.0% to 6.5%. The business cycle is obviously nearing its peak so we may see a pickup in productivity as capital investment starts to pay off.

Normalized Monetary Policy

As economic growth picks up and deflation themes erode, the reflation trade and increase of inflationary pressures should prompt the Federal Reserve to be more aggressive in their journey back to interest rate normalization.

Richard Bernstein from Richard Bernstein Advisors writes, “However, this past summer’s hackneyed theme of “lower for longer”, meaning that interest rates would stay lower for longer than investors might expect, might prove to be the swan song for the deflation investment theme. Secular global stagnation and deflation probably ended last February, and our portfolios have been positioned for improving nominal growth for much of 2016.”

As Trumponomics and additional global stimulus is enacted this year, inflationary pressures will return after years of subdued readings. Bernstein writes, “inflation expectations, measured using the Fed’s supposed favorite measure of inflation expectations, actually troughed last February. The upcoming administration has so far argued for the largest Keynesian stimulus package since the Depression, and thus the upward move in expectations for inflation and nominal growth has accelerated. The new administration’s economic package might not match that promised during the campaign, but it seems reasonable to assume that there will be more fiscal stimulus rather than less, and that the positives of fiscal stimulus will be greater than the potential negatives from the normalization of monetary policy and rising interest rates.”

“The global economy might still be in secular stagnation (although we are increasingly doubtful), but cyclical acceleration is clearly underway. Leading economic indicators (LEIs) around the world are strengthening in a unified manner that hasn’t existed since the credit bubble.

Chart 6 shows the relationship between the current global LEIs to those of three months ago. If a country lies above the diagonal line in the chart, then the rate of change in that country’s LEI is stronger than it was three months ago. If a country is below the line, then the rate of change is deteriorating. Most LEIs are improving in unison, which indicates broad improvement in the global economy and an increasing chance of rising interest rates over the next year or so.”

“The slope of the yield curve is one of the most reliable indicators of future nominal growth. Steeper curves forecast faster nominal growth, flatter yield curves forecast slower growth, and inverted yield curves forecast recession.

Global yield curves are steepening, which supports the forecasts  of global leading indicators. Chart 7 shows the percentage of global  yield curves that are inverted (i.e., forecasting a recession). In 2008, 41% of global yield curves were inverted. Currently, it is only 2%.  The US yield curve, for example, has been steepening for 5 months.”

Scott Grannis of Calafia Beach Pundit writes, “The December CPI reading showed prices up 2.1% over the past year—the highest reading since oil prices started to plunge beginning in mid-2014.”

“What happened with oil and the CPI in the past few years was remarkably similar to what happened in the mid- to late 1980s, when oil prices also collapsed and headline inflation followed suit. Once oil prices stopped declining, as they eventually did both times, then headline inflation jumped back up to where it was before the oil price shock, as the chart above shows. To the extent that the world has been worried about inflation being "too low" in recent years, it was a mistake. Inflation has been alive and well all along.”

“The chart above is remarkable, because it shows that there has been a very close relationship between nominal GDP and the M2 measure of money supply for many decades. This is why economists tend to prefer M2 above other measures of inflation: it's demonstrated a fairly predictable relationship to nominal GDP over long periods. But what is also apparent in the chart is the divergences of these two dissimilar variables over the past few decades. M2 "undershot" nominal GDP in the 1990s, and it "overshot" nominal GDP in the 2010s. Currently it looks like there is about $2 trillion of "extra" money sloshing around the U.S. economy. This is money that has for the most part been stockpiled in bank savings deposits which pay very little interest and which have more than doubled in the past 8 years (to almost $9 trillion currently).”

“As the chart above shows, M2 is now about 70% of nominal GDP, whereas for over three decades it tended to average about 57% of nominal GDP. The pronounced rise in the ratio of M2 to GDP is symptomatic of a general increase in the world's demand for dollar cash and cash equivalents. (M2 is comprised of currency, retail checking accounts, time deposits, retail money market funds, and bank savings deposits.) Not coincidentally, the dramatic rise in the demand for money has coincided with a pronounced increase in risk aversion, as I've been noting repeatedly over the years. But as I noted last week, small business optimism has improved rather dramatically of late, and consumer confidence is on the rise as well. And of course the stock market has hit new highs.

Optimism is making a comeback, and that in turn suggests that the world's demand for money is not going to continue to rise, and is more likely to begin to fall. If the demand for money does begin to fall, then the rate of M2 growth is likely to slow and/or the rate of nominal GDP growth is likely to pick up. Faster nominal GDP growth would likely include some pickup in both real growth and inflation. With inflation already running at 2% or so, any inflation pickup could—over the next year or so—begin to flash warnings signs that the Fed is falling behind the inflation curve.”

If the inflation picture and economic growth trajectory keep pace or accelerate from the current levels, the Fed may be forced to increase the pace of normalization.  It will be very interesting to see how the Bank of Japan and the European Central Bank respond to these events. Both are in the throes of quantitative easing measures and changing data points on a global scale may alter their current policies. In our opinion this would impact foreign equity markets and put further pressure on fixed income.

US Dollar

The US dollar broke to the upside upon the election of Donald Trump. It has since pulled back. On the weekly chart, it appears 100 is the support. That said, the MACD and several oscillators are heading lower. A break below 100 could mean an extended downward path for the greenback.

On the monthly US dollar chart, we are seeing bearish divergences everywhere. This could also spell a prolonged downturn for the US dollar. Support would most likely be in the 92 range.

With US economic growth expected to outpace the global average and the Fed embarking on a monetary tightening policy, it wouldn’t make sense that the dollar is looking weaker. That said, if the global outlook improves and inflationary pressures arise, many other central banks will need to move much quicker than the Federal Reserve in that they never stopped their monetary easing campaign while the Fed started their tightening policy. If the Fed turns out to be ahead of the curve and many of their global counterparts are forced into a rapid policy shift, that could have negative implications for the US Dollar that has, in our opinion already priced global monetary dynamics.

President Trump has been speaking openly about the strength of the dollar and has broken protocol of past administrations that were supportive of a stronger dollar. According to CNBC, “President-elect Donald Trump's shock comment that the dollar is too strong suggests the U.S. is about to declare as dead a two-decade policy of publicly favoring a strong currency.

"There's no question that the Trump administration would not want a strong dollar. A strong dollar does nothing good for whatever Trump is basically trying to do," said David Woo, Bank of America Merrill Lynch's head of global rates and foreign exchange research. "Yes, the U.S. fundamental story is bullish for the U.S. dollar, but the problem here is they actually don't want a strong dollar. I think it's going to go up. However, it's going to be a much more volatile climb."

Trump's remarks also took a shot at one of the most crowded trades on the planet — long wagers on the dollar. That trade has been a bet that Trump's policies will reflate the economy, causing interest rates and the greenback to rise. But that dollar move is at odds with building a more powerful American manufacturing base, because a strong dollar makes exports more expensive for foreign buyers.”

We would not be going short the US Dollar, even though it’s a fairly crowded long trade right now. But we do consider the weakening dollar as a possibility and that would have a profound impact on corporate earnings.

Earnings Picture

The corporate earnings picture has improved greatly from this time last year. As the next chart shows, the twelve-month forward earnings per share projections for the S&P 500 have started to head higher after a brief earnings recession last year.

The one month slope of earnings, a statistic we watch closely for earlier indications of a market correction – bear market has improved from last year as well and is solidly sloping positive.

Book value per share for the S&P 500 is heading higher although cash flow per share seems to have leveled off. This could be an early indication of earnings quality deterioration and we will monitor is closely.

With improving prospects of domestic economic growth, a stabilizing global economy and a weaker US Dollar, the corporate profit picture has room to run. Aggregate profit margins are off their peak from a few years ago, so margin expansion that originates from new sales as opposed to financial engineering is a very bullish sign for the stock market.

Market Technicals

On the long-term S&P 500 technical reading, it appears we are out of the woods from the negative readings received last year. On the monthly chart, we take a short bias in the market when the following steps occur. First, we need to see a MACD bearish cross. Once that occurs we wait for the index price to fall below its 20-month moving average and RSI to fall below 50. If the 20-month moving average slopes negative and the index retests and fails, then we position ourselves for the bear market. The chart below shows our warning signs (orange shaded area) and our bearish confirmation (red shaded area). Once the MACD crosses bullish, we remove the short bias.

At the start of last year, we were receiving several signals as a warning but never got the confirmation. The warning period (red box) turned out to be a consolidation period only.

Now all the signals are telling us to remain long the market.

Bottom Line: We understand that the market is not cheap at these levels and stock appreciation is being driven more by sentiment than by underlying fundamentals at this point. We do not want to fight the current trend. There are conditions that exist that we believe could drive the market 10% to 20% higher.

Fiscal Policy – Proposed infrastructure spending by the Trump Administration, if deployed correctly can provide a boost to economic growth and equity prices.

Economic Growth – We are seeing signs of life from the manufacturing sector that seems to have been so dormant for the longest time.

Monetary Policy – Any tightening from this already accommodative policy will more than be offset by introduced fiscal easing.

US Dollar and Profits - A weakening US Dollar and an accelerating corporate profit picture will be good for the stock market in our opinion.

Market Technicals – We believe the longer-term S&P 500 chart has given us the confirmation (at least temporarily) to be long the market.

 Joseph S. Kalinowski, CFA

Email: joe@squaredconcept.net

Twitter: @jskalinowski

Facebook: https://www.facebook.com/JoeKalinowskiCFA/

Blog: http://squaredconcept.blogspot.com/

No part of this report may be reproduced in any manner without the expressed written permission of Squared Concept Asset Management, LLC.  Any information presented in this report is for informational purposes only.  All opinions expressed in this report are subject to change without notice.  Squared Concept Asset Management, LLC is a Registered Investment Advisory and consulting company. These entities may have had in the past or may have in the present or future long or short positions, or own options on the companies discussed.  In some cases, these positions may have been established prior to the writing of the report. 

The above information should not be construed as a solicitation to buy or sell the securities discussed herein.  The publisher of this report cannot verify the accuracy of this information.  The owners of Squared Concept Asset Management, LLC and its affiliated companies may also be conducting trades based on the firm’s research ideas.  They also may hold positions contrary to the ideas presented in the research as market conditions may warrant.

This analysis should not be considered investment advice and may not be suitable for the readers’ portfolio. This analysis has been written without consideration to the readers’ risk and return profile nor has the readers’ liquidity needs, time horizon, tax circumstances or unique preferences been considered. Any purchase or sale activity in any securities or other instrument should be based upon the readers’ own analysis and conclusions. Past performance is not indicative of future results.

Market Sentiment Gaining Momentum

We’ve completed our eighteen-month audit for our Fishbone Trading Fund. Since (July 2015) we are up 29.1% gross return. We trade primarily large cap US equities that reside in the S&P 500. Using this index as our benchmark, the S&P 500 was up 5.2% during the comparable period.

The Fishbone Trading Fund is a discretionary portfolio dedicated to providing superior returns on investments in all market conditions.  The objective is capital appreciation and growth. The portfolio aims to achieve a high absolute rate of return by utilizing proprietary fundamental metrics applied with proven behavioral finance methods expressed mathematically.

Market Sentiment

Post-election, market sentiment and economic expectations are really picking up momentum. From Business Insider, “The final January reading of consumer confidence from the University of Michigan came in higher than expected. The reading on US consumers' outlook was 98.5, better than the 98.1 expected by economists. This was also above the initial reading of 98.1 earlier in the month.”

“Consumer confidence has surged in the wake of the US election, as improved outlooks for growth and jobs have bolstered the index.

"Consumers expressed a higher level of confidence January than any other time in the last dozen years," said Richard Curtin, the survey's chief economist. "The post-election surge in confidence was driven by a more optimistic outlook for the economy and job growth during the year ahead as well as more favorable economic prospects over the next five years."

Curtin did caution that the current boost in confidence comes from expectations and not actual improved circumstances. "Overall, the post-election surge in consumer confidence was based on political promises, and not, as yet, on economic outcomes," said the press release.”

“According to Curtin, consumers are actually borrowing more in anticipation of interest rate hikes from the Federal Reserve. Increasing inflation expectations have led the Fed to raise their expectations for the number of interest rate hikes in 2017.”

We see this divergence between expectations and actual data with the latest durable goods orders from the Commerce Department falling short of expectations and the tepid 4Q16 GDP figures.

Small business optimism has surged post-election on expectations of brighter days ahead.

According to Calafia Beach Pundit, “Small businesses, who employ 48% (57 million) of all private sector employees, are apparently feeling MUCH better about the future, presumably because they believe that President-elect Trump will be good for business. Regulatory and tax relief such as Trump promises would almost certainly result in more investment, more jobs, and more growth.”

“As the chart above shows, consumers are also feeling better these days. According to the Conference Board, consumers are more confident today than at any time since the current recovery started.

All of this is crucial and augurs very well for stronger—perhaps much stronger—growth in the years to come. Confidence has been sorely lacking during this recovery, and it shows in the lackluster growth of business investment, as seen in these charts:”

Tracking fund flows is another way we track market optimism. As seen from the ICI fund flows data, equities as a percent of total assets is roughly 52%. At the start of the past two bear markets, market euphoria was much higher than it is today as measured by equities as a percent of total assets. The number that we look for is 55% exposure to equities as a sign that market sentiment is running full steam. This means there is quite a bit of money out there that can be rotated into equities providing the fuel higher.

The Fat Pitch blog goes further on the asset allocation. “Among the various ways of measuring investor sentiment, the BAML survey of global fund managers is one of the better as the results reflect how managers are allocated in various asset classes. These managers oversee a combined $500b in assets.

The data should be viewed mostly from a contrarian perspective; that is, when equities fall in price, allocations to cash go higher and allocations to equities go lower as investors become bearish, setting up a buy signal. When prices rise, the opposite occurs, setting up a sell signal.”

“Fund managers' cash levels dropped from 5.8% in October to 5.1% in January; cash is up slightly from December. Recall that 5.8% was the highest cash level since November 2001. Cash remained above 5% for almost all of 2016, the longest stretch of elevated cash in the survey's history. Some of the tailwind behind the rally is now gone but cash is still supportive of further gains in equities. A significant further drop in cash in the month ahead, however, would be bearish.”

“Fund managers were just +5% overweight equities at their low in February 2016; since 2009, allocations had only been lower in mid-2011 and mid-2012, periods which were notable bottoms for equity prices during this bull market. Allocations in January have jumped to +39% overweight, a 13-month high. This is now slightly above neutral (0.4 standard deviation above the long-term mean). Over +50% overweight has historically been bearish (dashed line).”

“In February 2016, 16% of fund managers expected a weaker economy in the next 12 months, the lowest since December 2011. They are now optimistic: 62% expect a stronger economy in the next year, a 2-year high. Pessimism explained their prior low allocation to equities and high allocation to cash; that has now changed.”

“US exposure had been near an 8 year low during the past year and a half, during which US equities outperformed. US equities have been under-owned. That's changed. In January, fund managers were +14% overweight (the same as last month). This is 0.9 standard deviations above its long-term mean.  Bearish sentiment is no longer a tailwind for US equities. Above +20% overweight and sentiment would become a headwind (dashed line). Close, but not yet.”

Bottom Line: The market sentiment picture is improving at a brisk pace. Whether economic realities can live up to expectations remains to be seen. We are cautious in our outlook but understand “animal spirts” is a powerful market force that will propel the market higher.

Joseph S. Kalinowski, CFA

Joseph S. Kalinowski, CFA

Email: joe@squaredconcept.net

Twitter: @jskalinowski

Facebook: https://www.facebook.com/JoeKalinowskiCFA/

Blog: http://squaredconcept.blogspot.com/

No part of this report may be reproduced in any manner without the expressed written permission of Squared Concept Asset Management, LLC.  Any information presented in this report is for informational purposes only.  All opinions expressed in this report are subject to change without notice.  Squared Concept Asset Management, LLC is a Registered Investment Advisory and consulting company. These entities may have had in the past or may have in the present or future long or short positions, or own options on the companies discussed.  In some cases, these positions may have been established prior to the writing of the report. 

The above information should not be construed as a solicitation to buy or sell the securities discussed herein.  The publisher of this report cannot verify the accuracy of this information.  The owners of Squared Concept Asset Management, LLC and its affiliated companies may also be conducting trades based on the firm’s research ideas.  They also may hold positions contrary to the ideas presented in the research as market conditions may warrant.

This analysis should not be considered investment advice and may not be suitable for the readers’ portfolio. This analysis has been written without consideration to the readers’ risk and return profile nor has the readers’ liquidity needs, time horizon, tax circumstances or unique preferences been considered. Any purchase or sale activity in any securities or other instrument should be based upon the readers’ own analysis and conclusions. Past performance is not indicative of future results.