Mast Investment Letter January 2020

The January 2020 Investment Letter, along with our weekly reports and monthly investment strategy report, provide information about investors’ long-term expected returns, real and nominal, for equity and fixed-income assets, and relative asset returns and opportunity. New Year forecasts are popular, thematic and based on feelings derived from financial product characteristics. Expected returns are market-based and superior for asset allocation and financial planning assumptions. While risk asset expected returns decelerate, $4.4 trillion of public pension funds increase riskier asset allocations due to extraordinary need for higher returns to fund inadequate benefit reserves. Cash builds at Warren Buffett’s Berkshire and in high-net-worth investment accounts. Wealth management strategy keys off its financial product array, not market-based benefits, risks and returns. Similar to public pension plan grasping for returns, wealth management products create new and risky CLOs, private equity bond default risks and loss-write-downs. Real estate products transfer risk to wealth management investors via house-flipper and residential rental bonds. Baby boomer yard sale is in full swing. Excessive debt on poor-performing collateral is the cusp of the next yard sale. Of particular interest to investors, advisors, financial consultants and planners will be Mast year-end and investment strategy reports posted at the Mast website next week January 6, 2020.

 

 

 


 

 


 

Mast Market Analysis Data Report 01/24/20

Market Analysis Data. This includes price behavior trading range position, trending price direction and degree of change, trend and trailing earnings, dividends, comparative interest rates and trends, expected returns, risk premiums and historical (generally back to 1959) averages. We maintain all the data and models which are summarized on Market Analysis Data. This is a source of Mast investment allocation decisions and regular reports and studies which consider current conditions and factors of recent and notable change or exception.