Mast Investment Letter April 2019

Zero interest rates for a decade grew a mountain of debt. Total U.S. debt now 3.6X U.S. GDP compared to 2.4X in 1990, since 1980 15X increase of debt compared to 7X increase in GDP. Federal government required transfer of risk financial assets from their bank representatives to unprotected client investment accounts, usually in wealth management separate divisions. In turn, those accounts are sold into expensive, leveraged, illiquid products. Federal government also failing to fund burgeoning retirement liabilities, similar to state and local under-funding their public employee retirement liabilities. Any solution will include accurate investment return assumptions, not faking it with financial product stories and conflated return forecasts. Are market-based risk asset expected returns acceptable compared to 2.5% 2-year Treasury? The Mast Investment Letter April 2019 is posted at the website accessible for registered readers, and also on the complimentary page accessible to everyone. Thank you for referring others who might benefit from the observations and analysis.

 

 

 

 


Mast Investment Letter March 2019

Banks eliminated the names of the failed financial product sales firms they rescued in the 2008 financial crisis. Wealth manager revenues decline further as clients de-risk from the old products and while new products introduce new risks. Private equity funds continue selling assets into the new products, unloading risks to other investors. Buffett/Berkshire increase cash lacking risk-adjusted/acceptable returns in either public or private markets. In government-first states spending in excess of revenues causes doubling of most taxes (property, income, sales, transaction fees). In return, residents receive unrequested group identity conflict, collapsing services and infrastructure. Similar to public mismanagement, investment feelings override calculations. Important assets/savings/resources seek shelter from investor late cycle impulsive tendencies. Use reliable measurements for decisions, and do that soon.  Register/sign into Mast website to review the February Investment Strategy Report with additional criteria guidance: Asst Allocation Assessments / Portfolio Weights / Market Weights https://mastinvestment.com/login

 

 

 

 

 


 

 

Mast Investment Letter February 2019

Emerging risks in financial products, including index funds and ETFs, have scaled to levels causing declines in wealth management assets/earnings and attention from regulatory and supervisory authorities.  The February 2019 Mast Investment Letter is posted on the Complimentary Reports page of the website: https://mastinvestment.com/complimentary-reports.  Metrics are provided (maintained and monitored) to prepare and utilize a measurable strategy to benefit from the wealth management financial product yard-sale.  U.S. stocks long-term real expected return is 4.15% (versus 5.30% long-term median).  Equity risk premium is 3.06% on top of the below-average long-term TIPs yield of 1.08%.  Investor preparations 1) Exit wealth management financial products (and ETFs) before the crowded yard sale 2) Invest in 3mos. – 2year Treasuries (generally 2.5% yield).  3) Establish investment-target expected returns, risk premiums, spreads, channel positions and 4) Execute your strategy as target criteria are achieved.  Don’t just sit there in the products, do something.  Financial products/stories diversify and concentrate your losses because the markets do not conduct transactions on product and story information.  Fit yourself to the market information, not sales product information.  Take advantage of this opportunity.  The February report, and all other data, analysis, update and monitoring reports are available in the website for registered readers: https://mastinvestment.com/login

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Mast Investment Letter January 2019

Regulators express concerns about the increasing proportion of lending, borrowing, security holdings and investments which are non-bank custody or regulated. Our recent week and strategy reports indicate increased stock price volatility which may be a result, in part, of the large proportion of investment securities and assets held in less-liquid funds and products. Banks may now be safer, but investors aren’t. End investors will suffer more losses directly. Financial product aggregators are having much difficulty identifying their own products as the source of price and risk dislocations.