December 2018

“Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it” ~ Warren Buffett

The biggest challenge for long-term investors is seeing past short-term market noise. This was summed up best by Benjamin Graham who said, “in the short run, the market is a voting machine but in the long run, it is a weighing machine.” There are always issues that could affect markets, especially in the near-term, and this is reflected in knee-jerk investor reactions. However, only a few events of actual substance will drive markets in the long run.

Today's market environment is no different. The major sources of investor concern are around the Fed, trade wars, oil prices, and tech stocks, just to name a few. There have been developments around each of these in recent weeks which have contributed to greater stability in global markets. For instance, rightly or wrongly, the Fed is showing signs of reconsidering its rate hike path, there appears to be a trade war truce between China and the U.S., Russia and Saudi Arabia have agreed to limit oil production, and tech stocks have rebounded somewhat. New headlines add to these stories on a daily basis.

The beauty of long-term investing is that it's not only unnecessary to follow every headline, but it's actually beneficial to ignore this noise. Long-term investors recognize that markets can be extremely volatile over the course of days, weeks and months as investors "vote." But the market is still the best way to grow wealth over the course of years and decades as it weighs what really matters. And in most cases, what matters is the overall path of economic growth and corporate earnings.

From this perspective, it's clear that the economy is still healthy, but that we're later in the business cycle. U.S. stocks are still attractive but are no longer cheap. Corporate earnings have been extremely strong in 2018 but will likely slow their pace of growth in the coming years. It's not necessary to follow the market play-by-play to know that it's important to stay balanced and diversified in this environment.

We think the following three charts are relevant to our current environment.

1. Global markets have stabilized somewhat

Global Stock Market Performance
Find this chart under "Global Stocks"


Global stocks have been volatile in 2018, after an extremely calm 2017. It's important for all investors to understand that this level of volatility is normal for markets. Over the long run, those who can stay invested are often rewarded. Fortunately, markets have stabilized a bit recently, providing investors with some breathing room.

2. Oil prices are one concern driving markets

Oil and the Stock Market
Find this chart under "Global Oil"


Oil has been a source of volatility due to its collapse from over $75 per barrel to around $50 over the past two months. Oil is important since it is still the lifeblood of the global economy. While lower oil prices may be positive for many sectors over time, this is balanced against the immediate effects on the oil industry and other economic linkages such as the U.S. dollar.

The last time oil prices collapsed was from 2014 to 2016, evident in the chart above. This led to a decline in the U.S. energy industry which had been expanding rapidly due to new innovations and technologies, which fueled rising stock prices and high yield debt. The collapse led to a large decline in corporate earnings and caused stock returns to stagnate, especially in 2016.

Today, the impact on the U.S. stock market should be more limited. The S&P 500 energy sector is half the size it was then, and the industry is better structured. Still, it's another reason to expect overall earnings growth to slow over the coming quarters and is another reason for investors to stay balanced.

3. Earnings growth is near a peak but should still support market returns

S&P 500 Earnings Per Share
Find this chart under "Corporate Earnings"


Corporate profits have been a dominant driver of markets over the past nine years. Earnings have risen 166% since the recession, propelling stocks to new highs over this period. While earnings growth flat lined from 2014-2016 due to collapsing oil prices and a spike in the U.S. dollar, these effects eventually subsided.

However, after spectacular earnings in 2018, it's possible that we're near a peak in the growth rate. This simply means that the rate of growth will decelerate - not that earnings will actually fall. Slower growth will also mean lower expected returns. So, while U.S. stocks are still attractive, investors should focus on staying balanced by including fixed income and international investments in their portfolios.

The bottom line? Ignoring day-to-day market noise can be challenging. However, those investors who are able to do so are more likely to achieve their long-term financial goals.

As we close out 2018, we sincerely with you and yours the happiest of holiday seasons and want you to know how much we appreciate you & your support.

Brett                         Steve                          Becky


References to indexes and benchmarks are hypothetical illustrations of aggregate returns and do not reflect the performance of any actual investment. Investors cannot invest in an index and do not reflect the deduction of the advisor's fees or other trading expenses.

 This document may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of TRUE Private Wealth Advisors, LLC or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.

This is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

Nothing provided herein constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors.

Any reproduction or distribution of this presentation, as a whole or in part, or the disclosure of the contents hereof, without the prior consent of TRUE Private Wealth Advisors, LLC, is prohibited.


As many of you know, both Steve & I have been coaches at all levels from college to T-ball. One of the great things about sports is how they can be used to teach meaningful life lessons; and, if you get the lesson wrong, the downside might be only a loss to another little league team, not the end of the world. We thought we would use this newsletter to apply some of the lessons we use in coaching to help explain some of our investment philosophies.


# 1 - Focus on what you can control

As a baseball player, you have zero ability to control the pitch the other team throws, or the strike zone the umpire is calling, or the condition of the field. If you can’t control it, it is senseless to worry about it. You can, however, control how you adapt to these factors. For example, if the pitcher has a nasty curve ball, maybe you will move forward in the batter’s box, so you can hit the ball before the ball starts to curve. Or, if the pitcher throws really hard, you may move back in the box to give yourself a fraction of a second longer to get your bat on the ball. If the infield grass is thick and long, maybe as an infielder you move closer to home plate, so you can get to the ball more quickly.

The investment markets are similar in that there are many variables beyond our control. We can’t control the economy or where we are in the economic cycle, but we can control the positioning of investments to try to reduce the portfolio’s vulnerability to the most obvious risks and take advantage of current conditions. In doing this, it is still critical to stay diversified. This year’s investment climate could be characterized as being extremely narrow. By that we mean only a few sectors of the global markets are making significant advances. For example, as of this writing (10/19/18), consider the following year to date performance figures (all performance figures from Thomson One) :

• S&P 500 Growth (TR) Index: +9.9%

• S&P 500 Value (TR) Index: -1.5%

• MSCI Europe, Australasia, Far East (EAFE) Emerging Market (TR) Index: -15.1%

• EAFE International Index: -9.0%

• Bloomberg Barclays US Aggregate Bond Index (Gross Return): -4.5%

• Morningstar US REIT TR USD Index: -4.1%

• HUI Gold Index: -6.1%

….pretty narrow indeed! 1

To further the baseball analogy, the last 6 hitters have all hit to left field. Should you now move all your fielders to left field? Of course not! Maybe shift a bit in that direction, but you still need a right fielder. Otherwise, what could have been an out or a single becomes a homerun if you overreact and move everyone to left field. The same principle applies to why it’s important to stay diversified.

At the end of the day, we believe there are four key areas we can help bring to our clients a measure of  over their portfolios:

• Fees & Expenses - by finding and maintaining cost-effective investment products that continue to meet the complex and varying investment needs of our clients at all stages of their personal and professional lives;

• Taxation – by being cognizant of the after-tax returns in portfolios;

• Volatility management – by rigorously applying our discipline which has the potential to help mitigate some of the effects of large market drawdowns;2

• Investor behavior – by encouraging clients to clearly understand their risk tolerance and financial goals prior to the stress of a down market. Then, when things do get tough, helping clients to remain disciplined and stick to their plan.

We believe John Skjervem, CIO of the Oregon State Treasury, has it right when he describes PERS’ investment approach: “We remind people that on the investment side we are returns takers, not return makers. We go into the markets every day to compete…. the markets give a certain level of return, but we can’t create beta out of thin air.”


#2 – Be disciplined, even (especially) when it is hard

I love the sport of wrestling because of the intense discipline the sport requires to excel. It is so easy to find a reason not to get up for your 5:30 a.m. run, or not to get that extra practice session in with your coach. Instead, we urge our kids to find that one reason to go to practice or that one reason not to hit snooze on the alarm. Sometimes athletes lose discipline because things are going really well so they feel they don’ t need to stick with the plan that got them there – they take the easy road instead. Sometimes athletes lose discipline because they are not seeing the results as quickly as they had hoped. I tell our kids every year, “Plan your work, then work your plan”.

Our moving average process requires the same type of discipline. We have stuck to our discipline and it is working. Previous buy & sell decisions on international stocks, emerging market stocks, bonds and commodities have all added value. If you’re interested, we are happy to provide examples of the process at work in your portfolio. Again, just because most of the major asset classes listed above are down for the year does not mean there is an issue with the process.


#3 – Success is a marathon, not a sprint

True success can only be measured over relevant time periods. Having a good game or match doesn’t mean an athlete has arrived. The disciplined work must continue. If an athlete has a goal of being a US Olympic gymnast, each day in practice and each event along the path must be viewed as another step toward the ultimate goal.

For most clients, wealth is a means to an end, not the end itself. Whatever the objective for your wealth – whether a comfortable retirement, a philanthropic legacy, or to give your heirs a leg up on their dreams – viewing your situation from the context of a financial plan is useful. This is why, in periods of market stress, we regularly go back to the client’s plan to ensure we are still on track toward achieving their goals.

If you would like to review your financial plan, we are always happy to do so. We have multiple planning tools that can help with everything from “do I have enough money to retire” to ultra-high net worth situations needing complex charitable, insurance and trust strategies.

In conclusion, we have attached a chart that helps to keep market corrections in perspective.

As always, a sincere thank you for your support, and let us know if you have any questions.

Brett, Steve & Becky

image 1.jpg

[1] This newsletter is provided by True Private Wealth Advisors, LLC (“TPWA” or the “Firm") for informational purposes only and contains content that is not suitable for all investors.  No portion of this newsletter is to be construed as an offer or solicitation to buy or sell any security, or as the rendering of personalized investment, tax or legal advice. Past performance is no guarantee of future results and may be the result of market events and economic conditions that will not occur in the future.  There can be no assurance the views and opinions expressed in this newsletter will come to pass. Investing involves the potential for gains and the risk of losses. No investment management service, portfolio diversification, or investment strategy, including without limitation, Modern Portfolio Theory, can guarantee profitability of an investor’s account or protection from losses, particularly in declining markets.

    Certain information in this newsletter is derived from third-party sources that TPWA believes to be reputable; however, TPWA makes no representation with regard to the accuracy or timeliness of such information and assumes no responsibility to update any of the information in this newsletter; TPWA disclaims all liability for any damages resulting from any reader’s or investor’s reliance on such information.

    Historical performance results for market indices and well-known investment benchmarks do not reflect the deduction of transaction costs, custodial charges, or the deduction of investment-management fees, which would decrease performance results. Indices and benchmarks do not correlate directly or may correlate only partially to an investor’s portfolio due to differences in underlying investments, differences in strategies, or differences in objectives compared to the investor’s portfolio. Investors cannot invest directly in an index. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that a portfolio will match or outperform any particular index or benchmark. This newsletter refers to the following market indices and well-known investment benchmarks. For the indices and benchmarks which are shown as “TR” or “Total Return,” this indicates that this series of the index or benchmark calculates performance based on reinvestment of dividends, interest, and any other income:

S&P 500 Index: The S&P 500 Index is calculated and published by S&P Dow Jones Indices LLC, to reflect generally the U.S. large-cap equity market. It is a market-cap-weighted unmanaged index comprised of the stocks of approximately 500 companies with the largest market capitalizations trading in the United States. This index is referred to on the chart that accompanies this newsletter. The S&P 500 Index is used by the designer of the chart as a proxy for the broader equity market in the United States, in order to provide the market performance demonstration desired by the designer. Since the S&P 500 Index reflects the performance of stock prices, it will not necessarily perform the same as the mutual funds which comprise the portfolios of many of the Firm’s investors.

S&P 500 Growth Total Return Index: The S&P 500 Growth TR Index is calculated and published by S&P Dow Jones Indices LLC, and comprises those growth stocks included in the S&P 500 Index measured according to three factors: sales growth, the ratio of earnings change to price, and momentum. S&P Style Indices divide the complete market capitalization of each parent index into growth and value segments.

S&P 500 Value Total Return Index: The S&P 500 Value TR Index is calculated and published by S&P Dow Jones Indices LLC, measures the performance of the large-capitalization value sector in the US equity market. It is a subset of the S&P 500 Index and consists of those stocks in the S&P 500 Index exhibiting the strongest value characteristics.

MSCI EAFE Total Return Index: The MSCI EAFE TR Index is published by MSCI, Inc., and represents the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East, excluding the U.S. and Canada. The Index is available for a number of regions, market segments/sizes and covers approximately 85% of the free float-adjusted market capitalization in each of the 21 countries.

MSCI EAFE Emerging Market TR Index: The MSCI Emerging Markets TR Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets. As of March 2018 it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country.

Bloomberg Barclays US Aggregate Bond Index (Gross Return): The Bloomberg Barclays US Aggregate Bond Index is a broad-based index that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). Prior to August 24, 2016, this Index was called the “Barclays Capital Aggregate Bond Index,” and until November 3, 2008, was called the "Lehman Aggregate Bond Index."

Morningstar US REIT TR USD Index: The Morningstar US REIT TR USD Index is a free-float-weighted index that tracks the performance of publicly listed real estate investment trusts, or REITs. The qualifying REITs are identified by Morningstar's proprietary Global Equity Classification Structure.

The performance of indices linked to the prices of stocks, exchange-traded funds, or other equity investments will differ from the performance of mutual fund investments that comprise a significant component of the portfolios of the clients of TRUE Private Wealth Advisors. It is not possible to invest directly in an index. Performance does not reflect the expenses associated with management of an actual portfolio. Graph Source:


2  Past performance is no guarantee of future results. There is no guarantee that our strategy will minimize or reduce losses experienced in any investor’s account, or improve the performance results of any account.

The four most dangerous words in investing are “This time it’s different.” - Sir John Templeton


If the first five months of the year are an indication of what’s to come, we might be in for a volatile second half of the year.   The strong gains of January quickly evaporated in February and March as fears of a trade war – particularly with China – began to dominate the headlines.   As of this writing, the financial press is reporting that tariffs between the two countries “are on hold,” according to US Treasury secretary Steven Mnuchin.

This has been a long and sustained economic recovery of nearly 10 years, far longer than the average expansion of approximately 39 months (Investopedia).  One of the hallmarks of the economic and market recoveries since the Financial Crisis has been the extended nature of each segment of the recovery.  Think back to the early part of the recovery; it was referred to as an “L” shaped recovery – meaning basically not much recovery at all.  A dramatic drop in economic and market strength followed by a subdued economy that still hasn’t sustained consistent growth over 3%.   This slow but steady growth has been remarkably consistent and many economists expect it to continue into 2019 (Federal Open Market Committee Projections, 3/21/18).

Interest rates also have stayed exceptionally low for a long time.  About the time the media and strategists were touting “lower for longer” in mid-2016, interest rates finally bottomed on the 10-year Treasury at roughly 1.37%.   Since that time, rates have slowly but steadily climbed to about 3.1% today (Thompson ONE Financial data services, as of 5/29/18).

Because of these prolonged portions of the economic cycle, we believe many investors have lost sight of the fact that the cycle itself has followed traditional recoveries.  Take inflation and interest rate expectations, for example.  Traditionally, once inflation expectations bottom and begin to climb, traditional income-based investments often experience subpar performance.   This stands to reason, as a unit of income in an inflationary environment is worth less in the future than today because it loses purchasing power.  So, what has happened with income oriented investments since July ’16?  The Barclays Aggregate Bond index has declined (price only) 7.1%, S&P US REIT Index is down 12.3% (price only), and Alerian Master Limited Partnership Index is down 19%.  All this has happened in a period where the S&P 500 Index price return has gone up 31%. (Thompson ONE Financial data services).

The point is, this is classic later economic and market cycle activity (Richard Bernstein & Assoc.).  What tends to do well in the portion of the cycle? The S&P 500 Financials (+54%), S&P US Industrials index (+35%), Bloomberg Commodity Index (+24%) are examples of the late cycle sectors that we believe make sense to favor.  Of course, this part of the cycle will pass as well, and we will do our best to keep portfolios positioned appropriately.

Why Growth Matters

There continues to be much talk about the recent tax cuts, the long-promised infrastructure spending plan and deregulation.  Intelligent people have very different opinions on these issues and we hear both sides of these debates from clients.   All of these issues spill over into the conversation about the National Debt.   Take a look at the chart below.  Mandatory spending (things that are not negotiable without changes to law) plus interest on the debt make up 76% of the Federal Outlays.  Include defense, and you are now at 88% of budget.  That means that all of the budget fighting is really over 12% of spending – yes, that means we have a problem.  


Source Agri-Pulse Communications, Inc.  May 29,

It is really hard to balance a budget when only 12% of expenditures are on the table.  One of the only viable solutions: grow the economy faster than anticipated and as a result increase revenues.  Tax policy, budgets & appropriations all matter but none of them can solve the deficit issues except growth (Rick Santelli, CNBC 5/21/18). 


Our model portfolios continue to be overweight equity and underweight fixed income.  We also have a meaningful position in commodities in models.  Within equities, we have a slightly higher weighting to international than domestic stocks.   This is driven in large part by the historically wide valuation gap between US Stocks and International stocks.  Currently, the forward PE ratio of the US Market is 16.6% vs Non-US stocks at 13.1% - nearly a 27% premium.  Historically US stocks have traded at a premium to foreign stocks but the premium has generally been in the 5-10% range (Yardeni Research, Inc.).  If these ratios revert to the mean, foreign stocks appear attractive to us.

Final Word

Many of you are aware that Steve’s wife is battling a serious illness.  I’m happy to report that treatments and surgery have gone well and the results from tests has been encouraging.   Please continue to keep the Altman family in your thoughts and prayers.

As always, we appreciate your support and trust.

Brett, Steve & Becky

"It’s better to know how to learn than to know". – Dr. Seuss

Happy 2018!  For investors, the New Year has kicked off in grand style with the S&P 500 up over 6% as of this writing.(1) The market action has been explained by the media as a “melt up” or a “FOMO rally” (fear of missing out).   Regardless of what you call it, the rally has been broad based and very powerful.  In this letter, we will attempt to spell out what we view as the strengths of the rally, what concerns us, and how & why our portfolios are positioned as they are.


The Backdrop

As 2017 came to a close, fewer global economies were in recession than at any other time in modern history.(2) Europe is humming, Japan seems to have finally emerged from a nearly 30-year recession, emerging markets have once again been a catalyst for growth and the US continues its nearly 9-year economic expansion.   Clearly this coordinated growth and related strong corporate earnings have fueled global equity markets.  The US reduction in corporate tax rates is just the latest fuel added to this mix.

Richard Bernstein, who we follow very closely, often says, “’Good” or “bad” doesn’t matter; markets care about “better” or “worse.’”  So perhaps the right question to ask is “can things get much better?”  Time will tell on that, but we know that some elements which may eventually provide a head wind to the market are beginning to show.  Interest rates appear to be going up as the yield on the 10-year Treasury bond has moved from a low of 1.33% in July 2016 to recently over 2.65%.(3) Higher bond yields present competition to stock investments.  The Fed raised interest rates three times in 2017 and are suggesting three additional hikes this year are likely.(4) While the Fed is suggesting they are not necessarily tightening monetary policy - instead normalizing it – the fact of the matter is higher rates eventually slow economic growth.

We have written several times about the fact that this rally has been widely under-owned and discounted by investors of all types: funds, institutions and individuals as evidenced by Merrill Lynch’s Sell Side Indicator.  Since the financial crisis, this indicator has regularly shown an excessive amount of bearishness on the part of investors(5) – a historically positive contrarian indicator for the market.  Indeed, as investors have been overly pessimistic, markets have moved consistently higher.  Recently, this indicator has indicated that the pessimistic phase may be over as investors have improved their outlook markedly.  This could be an early sign of a change coming.  Consider what Warren Buffett has said of his investment philosophy, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful”. 

The duration of the economic expansion and the stock market advance are clear, both have been in full swing since 2009 – a full nine years.  However, what has the markets return been over the past 10 or 20 years? It all depends on where you start comparing from.  For example, from its low in March of ‘09 the S&P 500 is up over 300%, an incredible move.  But, from its peak in March of ’00 it is up only 78% over the past 18 years roughly 4.5% per year – not that great.(6)   My point is that returns are often a matter of perspective.


 Our Approach

We remain confident in our approach that utilizes the 50 & 200 day moving averages to detect trends in a variety of asset classes.  This approach has caused us to overweight equities and underweight fixed income for the vast majority of the past 5 years.(7) When you think back to all that has occurred over that time, from terrorism to nuclear threats to unpredictable political environments it was very tempting for clients to want to move to the sidelines.   Of course, in hindsight, that would have been the wrong move.   Our gut instinct was often to reduce equities in our models, but our belief in our process caused us to sit tight and hold even when it was uncomfortable to do so.  No approach is perfect – ours included – but following our discipline has allowed us to get our fair share of the upside of the market while having a specific sell strategy when things start to get break down. 

Looking back on the last meaningful downturn in the market is helpful in understanding our process.   In July of 2015 our moderate model was approximately 67% equity, close to the maximum we can go in stocks.  That Summer Russia invaded Ukraine and the markets started to get jittery. By the end of July, the moving averages had broken down for our European holdings as well as our International holdings.  In August, we started the month at 54% equity and in September one equity class after another broke down so that by mid-September we were down to 35% equity in accounts.(8) People forget that by February ’16 the S&P was down over 15% from its recent high.(9) In contrast, our moderate accounts were generally off not more than 6%.(10) Clients were not happy to be down and neither were we.   But, coming back from being down 6% is much easier and quicker than coming back from being down 15%.   We tell clients all the time, by the time the markets break down you will wish we had sold earlier and so will we.  But, the fact is that our process has done a good job of getting out of harms’ way in a timely manner and has provided the discipline to stay invested even when it was uncomfortable to do so.


Current Positioning       

We are at or near maximum levels of equity in each of our models.  We are also at or near minimums in fixed income in each of our models.  Alternatives are neutrally weighted per our benchmarks.  Within equities we are more overweight international than at any time since we founded TRUE.  Over half of our equities are now international – a reflection of better foreign economic growth rates as well as persistent under performance of international equities until last year.   We think that this combination of factors bodes well for the out performance of international stocks for the next several years. 

Another area that we think looks attractive are commodities.  With coordinated international growth, it stands to reason that increasing utilization of commodities is likely to occur.   Additionally, because of the poor returns of the commodity complex over the past decade or so, this asset class has not garnered much interest from investors.(11) We believe that could change; being in the asset class early may be beneficial.


2017 Tax Reporting Statements

Year-End Investment Reports, as well as 1099R and 5498 Forms for IRA accounts (Traditional, Rollover, Roth, SEP) are now available online.  If your document delivery preference is US mail, you should receive them in about two weeks.

For all other accounts, tax statements will begin to be available mid-February.  For most accounts, 1099 tax statements are posted online and/or mailed by February 15th; however, a limited number of forms for accounts that hold mutual funds pending reclassification, or certain complex securities including unit investment trusts, mortgage pool securities, and real estate investment trusts are mailed and posted online by March 15th (contingent upon Fidelity’s receipt of a mailing deadline extension from the IRS).  This later mailing cycle minimizes the need for corrected tax forms.  If you have not received your tax documents by the end of March, please let us know.



Some events in life just stop you in your tracks.  We have had three of those in the first few weeks of this year that have profoundly impacted our family here at TRUE.  Events like this are reminders that life is precious and fragile, and encourage us to appreciate those people who are important in our lives.   Please take the time to tell your loved ones you love them and don’t take anything for granted.

In gratitude, 

Brett, Steve & Becky

1,3,6,9,Capital markets data provided by Thomson ONE®

2 TheoTrade Analysis Team, TheoTrade, LLC, 2018 Expected To Have The Fewest Countries In A Recession Ever,Fx Street (Nov. 13 2017).

4 Merrill Lynch RIC Report® (Jan. 9 2014)

5 Merrill Lynch Sell Side Indicator (Dec. 1 2017)

7,8 TRUE Davis Altman Investment Committee

10 Model performance calculated by Envestnet® Performance represents the results of actual trading in a representative account managed according to TPWA’s investment strategy for the time period January 1, 2013 through December 31, 2017.  Results reflect the deduction of a model advisory fee, transaction expenses, the reinvestment of dividends and interest, and internal expenses of investments.  Actual results of TPWA clients managed according to this strategy varied materially, and there is no assurance the same or similar performance would be obtained.  Returns represented are for illustrative purposes only.  These materials are provided by True Private Wealth Advisors, LLC (“TPWA” or the “Firm") for informational purposes only and may contain content that is not suitable for all investors.  No portion of this commentary is to be construed as the rendering of personalized investment, tax or legal advice.  Past performance may not be indicative of future results and may have been impacted by market events and economic conditions that will not prevail in the future.  There can be no assurance the views and opinions expressed in this letter will come to pass.  Investing involves the potential for gains and the risk of loss, and diversification does not necessarily guarantee profitability or protection from declining markets.  Certain information included within is derived from third-party sources that TPWA believes to be reputable; however, the Firm makes no representations with regard to the accuracy or timeliness of such information and assumes to liability for any resulting damages.    

11 Richard Bernstein Advisors – Insights Dec.2017

Equifax Incident

Last week, one of the big four credit reporting agencies, Equifax, announced it experienced a security breach resulting in criminals accessing personal information of approximately 143 million Americans between May and July of this year. The compromised information included names, addresses, Social Security numbers, and dates of birth. In some instances, driver’s license numbers, credit card and credit dispute information were also compromised. This information is nearly everything that is needed to open an account in your name.

TRUE does not have a direct relationship with Equifax, but due to the sheer size of the breach, we felt it important to reach out and let you know what you can do to protect yourself.



  • Consider obtaining credit monitoring services. Equifax is offering free credit monitoring to all Americans, whether impacted by the breach or not. Several companies also offer similar services for a fee. Please note that credit monitoring does not prevent ID theft; it simply alerts you when events occur that may impact your credit.

  • Be on high alert for impersonators or phishing attempts by fraudsters. Be on the lookout for emails that appear to be from these companies, telling you that you’ve been impacted, or otherwise creating a sense of urgency, and to “click here” for more information. When in doubt, do not click the link. Any legitimate company will have another way for you to contact them to be sure the email is safe.


As always, thank you for your business and trust. If you have any additional concerns, don’t hesitate to reach out directly.

Brett, Steve & Becky

“There are three kinds of lies: lies, damned lies – and statistics”. – Benjamin Disraeli


It is always hard to know where we are in a market cycle at any given time.   Given today’s unpredictable political climate and geo-political risks, it makes it even more difficult.  And it becomes even more confusing when so many economists “data mine” economic reports to justify their view.   We feel like it is important to provide some color around what seems to be a sense of caution creeping into the market.  Indeed, in today’s headline crazy environment the same report will be used to support both a bullish & bearish view on CNBC.  For example, is the market over-valued?  

  • Goldman Sachs issued a report in late July that suggested the forward P/E multiple of the S&P 500 has risen by 80% since 2011 and the trailing PE ratio of 22.1 is well above the 10-year average of 16.7%.   Sounds pretty scary, right?  

  • Richard Bernstein points out that average rolling 5-year annualized returns for Bull Markets is 21.4% but the current return is 14.8% which, far short of typical bull markets final run.  He argues strongly that the three primary investment factors are profits, liquidity and investor sentiment - all three of which are constructive in his view.

Two very highly regarded sources with very different views.   In times like this we think it is useful to understand what is “normal” in relation to the market.  According to Forbes:

  • Since 1950 there has been ONE stock market crash (defined as a 50% correction or more) and that was during the Financial Crisis of 2007-08.  The S&P 500 traded down more than 50% from its peak for 21 trading days.

  • The next most significant correction in the past 70 years was during the Technology Bubble of 2000-02 when the S&P 500 bottomed out -49.15% from its prior peak.

  • On average the S&P 500 corrects -10% about once per year, and -20% once per 3.5 years.

Human nature tends to take our most recent experiences and extrapolate them out into the future.   In the case of the stock market, because we’ve had two nearly 50% corrections in the past 15 years, many investors are sure the next “big one” is right around the corner.  Perhaps a better perspective is that while volatility - even to the extent of 20% corrections - is normal, a 50% type event is exceptionally rare. 

Of course, there is no way to know for sure.  That is why we continue to follow our Moving Average discipline across all asset classes. This quantitative and objective method has done an effective job of helping us scale clients’ exposures to different asset classes quickly in changing markets.  We are confident it will continue to do so in the future.  While no process is perfect, using a quantitative method removes emotion and allows for real time decisions to be made.


Year End Preparations

It seems bizarre to already be talking about year-end items but we are on the front end of the planning cycle for that stuff.  Here are some things that we will be talking about with clients in the next couple of months:

  • Tax loss selling, off-setting gains and losses, etc.;

  • Gifting strategies to both family and charitable enterprises;

  • RMD’s coordinating with any qualified accounts you hold outside of TRUE;

  • Reviewing and updating your financial plan.


As always, we appreciate your continued support of TRUE and the Davis Altman Group.   If there is anything we can do better to improve your satisfaction, please let us know.

Enjoy the last bit of Summer!

Brett, Steve & Becky

Seeing the Forest through the Trees…

Our job is an interesting one in many ways.  One of the things that we discuss regularly is the tone of calls that we are getting from clients.         Are clients collectively nervous and risk averse, or are they feeling optimistic and willing to stretch their risk profile in order to potentially capture greater returns?  We cannot recall a time when we have had less consensus amongst clients on where the market and the economy are likely headed.   A steadily improving economy and corporate earnings cycle is offset by ever present geo-political risks.  What is an investor to do? ...

Election & Markets

What a crazy few weeks it has been leading up to the Holiday Season.   We witnessed a Presidential campaign and election that defied all norms and expectations and culminated in a (at least to most) shocking upset as Donald Trump won the electoral college.   Even more surprising than the result itself was the market reaction…. regardless of your political leanings, NOBODY predicted an immediate 4% rally (and still going as of today) on a Trump win.  Whether the election results are causing anxiety or excitement in your house, we think it is important to look at the big picture and not get caught up in emotion.

Market Update

Back to School...

As students head back to the classroom we think it makes sense for us to look at some long term principals of investing that often get overlooked.   As our clients know, we believe deeply in the value our investment process provides.  Our quantitative system that allows us to objectively scale in and out of various investments has helped us avoid much of the market’s volatility while still participating in the upside.  We believe successful investing is part art, part science.  Our process is the science.  Our experience, access to quality research and the input of some of the best minds in the industry provides the art.  

The four most dangerous words in investing are “it’s different this time.”

– Sir John Templeton

Markets and Portfolio

Coming Around Again

Last August we moved client portfolios to an underweight position in stocks.  This was done due to the break down in the indicators we use that trigger our buy-sell decisions.  We maintained this cautious stance until April of this year when we started to see a positive reversal in those same indicators.  Currently, we are back to an overweight position in stocks.  

Market & Economic Update


When the Federal Reserve embarked on its monetary and fiscal policies to help the economy stabilize and emerge from the Great Recession of 2007-2008, predictions were rampant regarding the longer term consequences of those policies.  The most common predictions were that the US economy would enter a period of significant inflation and that the US dollar was likely to weaken – many were suggesting a collapse – in response to short term interest rates at zero and massive quantitative easing.  Another popular theory was that government deficits were exploding to the point where they would never recover.