BCA Weekly Commentary 2/5/21: Fiscal Sugar Rush


SUMMARY. Focus shifted this week to the prospects of Biden's $1.9 trillion stimulus package and its potential boost to economic growth. However short lived we believe this maybe, this cannot be ignored or dismissed. The "sugar rush" it will provide to the economy for 2021 post its passage may provide short term boosts to growth and with it higher interest rates & inflation which may sow the seeds for a difficult period of growth beyond the 2H of 2021.


INVESTMENT IMPACT. This week we eliminated our exposure to gold (when was for defensive purposes) as we perceived the "risk on" sentiment tied rising perceptions of accelerating economic growth may have become more apparent tied to higher fiscal spending. Weighing market risks against this we shifted to even higher weightings in the utility sector which may provide more exposure to economy plus yield while limiting risk. Furthermore, we added to our overall equity holdings especially our retailer holdings tied to a shift in higher economic growth prospects. Net net we reduced our cash positions mostly in our growth model portfolios while only slightly so in our income models. 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.

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