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Events & Resources 

The Red Sky Report delivers timely market trend commentary, highlights unique risks and opportunities and educates investors about the realities of behavioral finance.

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When is it Time to Switch Investment Strategies?

At some point in time, investors ask themselves this tough question. It’s understandable considering how much emotional currency we place on our own perceived success or failure with investing. Did I have a good year with my investment? Tough question. Relative to what? The markets? My own goals or design of my portfolio? My expectations? What my friends say? What CNBC says? No wonder, we all feel that sense of anxiety about how we’re doing and whether we should change investment strategies. There are clear answers to these questions for mature investors who understand markets and themselves. Let’s dive in.

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Three Days To Get These Done

My desk is full of “to do” lists. As I crossed off my final item, I thought I would share these with you all while we still have 3 business days left in the year, the decade, to help with your personal finances. The point of these “to dos” is simple. It about exercising our financial discipline, saving for our future and reducing our taxes. Today, I see far too many folks out there looking for a quick buck, a short cut or a fast track to financial independence. There is no such thing. There are other things you can do right up until tax deadline, but these must be done before year end. This is going to a brief update with the intention of pushing you to get these done. I’m not going to go into all the details of income limits, amounts, etc. because I think it’s important that everyone work to improve their financial literacy. You can find a ton of information with simple google searches and we’re happy to help in person, but I’ll provide links to some good information below for your researching pleasure.

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Unconventional Thinking

We are going to break our rules a bit with this update and do some forecasting as we head toward the end of the decade. We’ll highlight some good evidence suggesting that the winners of the last decade (or two) are not likely to be the winners of the next decade. 60/ 40 investors should read this carefully as there are some dire looking outcomes for this widely held stock/ bond blend. Today, we are seeing the potential next generation of leadership in sectors and asset classes develop. As we cross into the next decade, it may be just that time.

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Rotten Apples

Regular readers know that we are neither bullish nor bearish on the general stock market. We leave that to the forecasters who must have a lot of time on their hands. We do call out risks and opportunities as we see them however, focusing more on sectors, specific investments, behavioral economics, and systemic risks. If you hadn’t gathered, the theme for our commentary since April has been about selectivity – where you should invest your hard-earned capital and what to avoid. The market is a bucket of apples right now to be sure. You can find the good mixed in with a few of the rotten type. In this context, we should all be conscious of the rotten apple mantra, when the bad apples can ruin the whole batch. We’re hopeful that the rot stays contained. Today will be a clip fest of interesting charts and data I discovered in my weekly reading finishing with a couple of important reality checks that every investor should understand with total clarity.

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In Most Cases Stocks Are a Waste of Your Time

I get the appeal of owning shares of a specific company. Some part of our ego gets a little endorphin shot when we say, “I own that company”. However, in all but a few cases, given the rise of highly focused, sector-oriented exchange-traded funds, there is really very little reason to own individual names anymore. I’ll package this discussion inside the context of our New Power ESG strategy for our client’s benefit as well as any interested parties.

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Investing in Next Gen Companies as a Next Gen Investor

We’re very excited to rollout out our Next Generation services as we move into the 2020s. Today, while avoiding a complete spoiler, we’ll give you a little preview of what we’re planning. For this update, we’ll offer a compelling and timely suggestion to those young investors who are just getting started with their first investment accounts and want to participate in the global wave of Next Generation companies. Next-Gen investments for the Next Gen of investors! Feel free to pass this on to anyone (kids, friends, etc.) who is a younger investor. They will thank you!

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Get Ready for the Next Big Thing in Renewable Energy Investing

We talk a lot about “right place, right time” when it comes to making an actual investment decision. The environment for investing in energy storage, specifically large-scale battery manufacturers and associated companies, is approaching that right place, right time moment. Here’s what makes this investment option compelling and potentially actionable in the very near future. After reading this update, please reach out to us directly with your name and email to request a list of our top picks in this space – some we own already and others we expect to own soon.

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Edgy

Welcome to the 4th quarter of 2019! If you think the last 22 months has been exciting, just wait for the next 12 months. One year from now, we’ll be so sick of Federal election junk, we’ll all want to go back to tribal rule with lords and fiefdoms. Already there? October is one of those turning months. We have seen a larger than average number of significant bottoms in markets as well as the beginning of crashes and devastating bear markets begin in the month of October. This is the edgy time when smart investors will focus keenly on the scales of bullish or bearish readings to plan their next course of action. Let’s take a peek under the hood of the markets to help us find the edge.

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Notable Change in the Market Character

Things are starting to change. The light, colors, temperature and the financial markets. There are seasons to everything. Yesterday, we witnessed a notable change in the character of the markets that has us rotating in and out of different asset classes, sectors and holding. This will be a quick update with the intention of showing you how our system responds to changes in risk, opportunity and leadership as dictated by market trends.

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Market Jambalaya

Jambalaya (defn.) Jambalaya is a popular Louisiana-origin dish of Spanish, West African and French influence, consisting mainly of meat and vegetables mixed with rice. I have a disconnected blend of topics to cover today and this title feels appropriate. Financial markets, economic status, monetary policy, politics, real estate and corporate trends served up today… mixed with rice.

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Persistent Markets

While most have been out enjoying time with their families in the meat of the vacation month, myself included, we have seen very little change in the character of the markets. Now pushing up to a full year, we see the same asset classes, sectors and countries leading and the same list of laggards. All things are still pointing toward recession in the months ahead.

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Mid Year Investment Themes

Mid Year Investment Themes Given all the cross currents in the market, especially in light of the US economy, political forces, Fed policy and global trends, we thought this would be an especially important year to offer our take on what’s happening. On Monday, next week, we will be recording our first ever Red Sky Report LIVE as a video broadcast of our Mid Year Investment Themes. This update will set the stage. We hope you enjoy both the written and upcoming live versions.

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Gain Keeper, The “Right” Variable Annuity for You

We are heading into the heat of the summer here in Denver, and I wanted to talk about everyone’s favorite subject—variable annuities (kidding …). Annuities are generally sold, not bought. In many cases, they are a solution looking for a problem. We speak to a lot of clients / prospects, and no one ever seems happy with the annuities they have purchased over time. High costs, hidden commissions, surrender charges, and confusing language make it hard for most to know what they have purchased. The main issue is the lack of transparency.

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On the Rise

Summer is here! The sun is shining. Impending vacations are upon us. Overall, everyone’s mood seems to be on the rise. Speaking of “on the rise”, I wanted to give you a quick update on our Freeway Income model, and more specifically, the municipal bond part of those portfolios. We continue to believe that now is a great time to deploy any excess cash into the Freeway, given that the market is already talking about the Federal Reserve cutting rates over the next 12-18 months. Forward returns on cash are likely going down. The Freeway Income Model is built for taxable money. As such, we want to exploit the tax-advantaged nature of the municipal bond market. If you attended our Solution Series in May, you know that we increased the allocation to municipal bonds earlier this year in order to generate higher after-tax yields for clients.

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Three Lies and a Truth

As a spin on the summertime car game of three truths and a lie, we’re going to work through a few realities regarding recent history of Federal Reserve monetary policy, the timing of rate cuts and the impact on the financial markets. This will be more fun and educational than it sounds. Game on! Three Lies and a Truth We’ll format this game by posing a statement and then reveal the answer as True or False, with an explanation. Most of the questions are those you have heard recently in light of all the chatter about the Federal Reserve and when (or if) they will cut interest rates.

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Top 5 Mistakes I see Today

We all make mistakes. It’s not realistic to say that we can be error-free or avoid being wrong. The trick is to recognize when we are making a mistake and correct it quickly to limit any damage in the future. Seasoned investors understand this well and it takes the form of cutting your losses short (and letting your winners ride). This update will offer some insight into how your investment portfolio should be allocated now across the various asset classes. But there are other mistakes I see happening now outside of your investment portfolio.

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Lighthouse Project

Anyone familiar with the ad campaigns from Motel 6? Does Tom Bodett ring a bell? As the story goes, the iconic phrase that runs through the Motel 6 ad campaigns started as an ad-lib from Tom back in the mid-80's. The phrase-- “We’ll leave the light on for you” -- was a fantastic, down-home way to let customers know that Motel 6 cared about them. Thoughtful. Reassuring. This phrase was designed to evoke comfort after a long day of travel. In a similar way—and perhaps, only slightly less iconic—our “Lighthouse Project” is designed to provide similar assurances to our clients / prospects. The Lighthouse Project was designed to provide some guidance on active 401k and other self-directed investment accounts not under our management. It never hurts to know the risk and return potential of what you own, especially if you are looking to retire in the next couple of years.

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