SUMMARY. This week the economic data continued to support our concern over a slowing economy offset with prospects of additional fiscal stimulus in the form of an infrastructure bill. Falling 10 year Treasury yields confirm this concern (rates fall generally as economy slows) as does the shift in assets to large cap tech which some view as shielded from an economic slowdown.
INVESTMENT IMPACT. The shift in asset allocations mentioned above, we view may indicate and confirm our concerns over a slowing economy to come. Rather than playing the rotation (tied to what we deem high valuations in large cap tech) we are opting to maintain & add to positions that exhibit long term above trend secular growth decoupled from the overall economic. Often these names are smaller capitalization in nature, more volatile and exhibit movements decoupled with the ups & downs of the market. Thus, explaining why model portfolios are not rising in performance with the rest of market recently. However, when fundamentals are demonstrated either thru specific events or earnings the long-term value may get unlocked in these names. Day to day or even week to week swings in prices may not reflect this. Cash levels overall remain slightly elevated across models and for the week we added to existing positions and initiated new positions in stocks that we deem can grow with reasonable valuations and provide attractive risk/reward.
Our model portfolio performance has been updated on our website as of 6/30/21.
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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