September 2022 Insights
Greetings from Lion’s Eye Wealth,
At Lion’s Eye Wealth, we take investment ideas seriously to fuel all of life’s adventures. I picked the image above for it reflects a child’s curiosity that I hope we all hang on to as adults. I wish all of you with children returning back to school the best for a wonderful academic year!
There’s been so much “news” with the economy and markets that I’m releasing the September newsletter a bit early. My thoughts…
One reason to hire a financial advisor is for an opinion. This means that some will agree and some won’t, but the point is to say what appears to be true. With that, I realize some will agree with what I’m about to say and some won’t. To that end…
As most of you know, I am a research nut. I conduct my own independent research compiled from many sources. I am not held to a big firm’s agenda, research, and firm investments. I feel that what I do is very clean. I am troubled that we seem to have ushered in a time where our definitions of terms are being modified to suit a government and potentially globalist agenda. This year, we’ve watched the CDC redefine “vaccine” as no longer immunization but rather a therapeutic, many seek to redefine “recession” when the definition is two quarters of GDP declines, and “inflation” to be relative based on the category one is viewing. One of my research favorites went so far as to say when the government and the media are saying for instance “Patriot Act,” that the opposite is occurring. The “Inflation Protection Act” is spending and tax hikes which under prudent monetary and fiscal policy isn’t what’s needed with runaway inflation. Historically, inflation can be reeled in with timely interest rate controls and a decrease in government spending. The Fed alone has assets that have grown exponentially in the last ten years. The recent bill’s title, as some in both political parties have acknowledged, isn’t about inflation protection but rather spending and tax hikes which are counter to inflation control historically.
What does this mean for the economy and markets? It means that the government is moving in a way that traditionally isn’t done if it aims to combat inflation. Denying a recession and the triggers to inflation do not solve the root causes, addressing them might. As an advisor, since we are no longer dealing with what is historically done, I believe continued volatility will occur with potentially continued inflation, possibly even stagflation, along with a weakened US dollar. This also means we can’t rely on investments to serve us historically as they always have. As my alternative investment partners and I believe, now is the time for active, strategic management, not passive for this reason. It also means vetting proper investments for clients in line with time horizon and risk preferences is ever more important.
Below, I’ll outline investment themes I’m keen on given the above. I also encourage you to tune into the Lion’s Eye Wealth podcast, “Creating Real Wealth,” for wealth management ideas and market thoughts. I’m thrilled to announce that in three weeks I’ll be releasing a podcast and video with one of my alternative investment partners, Alan Strauss at Crystal Capital Investments.
GDP: Contraction over the last two quarters, new data out August 25
Consumer Confidence: Decreased in July, lowest in a decade, new data out August 30
New Home Sales: Fell 12.5% in July, down 29.6% year over year (lowest in 6 years)
Inflation: July saw a slight decrease to 8.5%
WHAT ARE INVESTING OPPORTUNITIES?
60% Stock/Equities to 40% Alternative Investments
I’ve written about the movement away from the traditional 60% stock/equities and 40% bonds to 60% stock/equities and 40% alternative investments. While there is no blanket pro rata share across the board for all investors due to tolerance for risk and time horizon, the movement out of bonds and into alternative investments has been a strong shift over the last decade. As you know, at Lion’s Eye Wealth, we have a strong, potentially even excruciating, vetting process for the most appropriate teams of professionals and strategies in the space. This includes Crystal Capital investments, ZEGA Financial, Galaxy Investments, and more.
Commodities, Energy, Utilities, Food, Private Farm Land, Private Infrastructure, Futures Strategies, Options Strategies, Foreign Currency Strategies
Poised to perform well with current market dynamics. I have vetted “favorites” in each category, message me if you’d like details.
Private Equity & Hedge Funds
Unique opportunities for Accredited Investors (investable assets over $1,000,000) and Qualified Purchasers (investable assets over $5,000,000 and net worth excludes primary residence). These range from tech growth options with larger lockups to macro strategies to private credit.
Rare Earth Minerals
There are 17 rare earth minerals that are essential for tech, space, and everyday use. In 1989, the US was a leader in rare earth mining until it was decided to farm this out to China due to cheap labor. A positive of the current spending is the US realization that it must become self-reliant for these minerals again, thus funds have been allocated to mining companies for exploration and mining in the US. The strategy here is to invest in the mining companies, an ETF with broad coverage, and/or companies recycling materials. Now is a great time to think about getting in early and holding these investments set to grow substantially exponentially (some say up to 300x but that is no guarantee).
Gold
From die hard gold enthusiasts to moderate to thinking gold is now officially dated, opinions on gold are vast but we believe as a hedge, an allocation to gold makes sense depending on preference, risk, and time horizon.
Flippening Stocks
Given the fast rate of change due to disruptive technology, we have a list of companies to buy into early as they are poised to perform well over the next 1-3 years. The stocks consist of: transportation 2.0, the future of healthcare, fintech, industry 2.0, 3D printing, clean energy, next-generation battery technology, and a few extras.
Rebalancing
We believe this is a time for active, strategic management and wise rebalancing to take advantage of the economic news presented above and the investing ideas shared.
