SUMMARY. This week with economic data mixed and corporate earnings marked by many disappointing outlooks concerns over the pace of growth in light of sky rocketing rates came into light. However, as soon as this arose, calls for more stimulus were heard alleviating those concerns but continuing the upward pressure on long-term rates. Unlike, other periods of monetary & fiscal stimulus, we may be entering a period whereby the more action taken with stimulus, the more forces are created to thwart the long-term growth benefits. Those negative forces or consequences are rising rates from rising inflation which in our eyes may beginning to occur all across the economy. Our conviction remains very high that ultimately this may lead to a period of very low growth for a sustain period of time beyond the initial stimulus. It may lead to a period of severe economic hardship for many in the lower-middle classes as the inflation tax hits hardest.
INVESTMENT IMPACT. Our view remains balanced between prospects of a spurt of short term growth with the negative effects of that growth. Thus, our significant weightings in utilities & health care. This week, we added marginally to our equity positions. We remain cautious on valuations, investor speculation and high growth expectations and are prepared to increase cash levels when appropriate.
Our model portfolio performance has been updated on our website as of 1/31/21.
For more insights see our website and disclosures found there at BCA. The thoughts contained in this newsletters are intended lend insights into BCAs current & future thinking on changes to BCA model portfolios. They are not intended to be recommendations and should not be taken as such. As always contact us for further explanation of how these events can affect your finances. To unsubscribe from our newsletters & website please email us with "unsubscribe" in the subject.