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$EEM may appear to be a bargain...

By: StudioCity'98



...but they can also underperform for a decade or more.  Check the charts. Often decades with 1-2 good years out of 10.  I own some in client model portfolio's but not overweight, 15%.

China may have $100's Billions of bad debt in their Shadow Banking sector being propped up by the CCP. If that pops Global GDP will likely shrink from 3.5% to ZERO% growth rate. Think long global recession. Credit default swap should be closely watched as early warning as stress in the system. CNY Renminbi breaking 7, if it were to occur would be a very big deal as the CCP intervenes every day in an attempt to maintain their peg range.

Not a fan of the Bond Market either. The typical 60/40 allocation will be hindered by the -neg drag of Bond allocation, and increasing convexity.  US Yield Curve shifting higher across the term structure. Although, the short-end will likely be 3.5% by late '19.  That's not a bad return for the risk-free rate (cash).

This Bull is long in the tooth. But long, strong trends in the Share Markets tend to last much longer than most people expect. This Bull will likely fight to the death before it rolls over and dies.  I'm cautiously optimistic for now. We're still long many great names & EFT's such as $IGV, $IWM, $MTUM...etc, etc. Short some names too, -30% short.

We've been moving client $$ to Real Estate for years. Class A Multi-family properties spinning off 18-25% IRR. Very comfortable there. Many areas of the country being over-built now though. So careful on any new purchases.

Triple-Net (NNN), is still solid, contracts with lease escalators to match any CPi and/or interest rate risk. I'm still a buyer there.

Hard assets are undervalued. Gold likely setting up for a long sustained run as budget deficit grows as a percentage of GDP, and China risk.  Uranium market HIGHLY UNDERVALUED. Just entering the beginning the stages of multi-year Bull in #U3O8 market.

SEC Registered Investment Adviser
Personal Opinion only,
NOT INVESTMENT ADVICE IN ANY WAY   

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