We looked at his chest. It was the best thing we ever saw.
It was moving.
A few seconds later, his eyes came back to life – first looking to the right and then coming around and locking in on our own.
It’s as if his big, wide eyes were asking the biggest question of their life.
“What happened?”
We went fly-fishing with a good pal and got much more than we expected. In one instant we were casting and chatting. In the next, we watched as he splashed lifeless into the water – one half of his face on the river’s muddy edge… the other in its cool, clear water.
We did what we had to.
Within minutes, panic subsided to worry.
When he got his color back, we walked home.
“I could feel it coming on,” he said. “I was really light-headed, and I could feel the sweat building.”
“You should have said something,” I replied softly back. “What if I wasn’t standing there?”
“I thought it would pass,” he said (something we’ve all said). “I didn’t want to ruin a good day.”
“Well…” we said as we changed the subject.
[mw-adbox]
A Turn for the Worse
If our fishing trip isn’t the perfect allegory for the stock market these days, we’re not sure what we could type this morning that would be any better.
We scan the headlines…
“Movie theaters in jeopardy…”
“Shell plans to cut 9,000 jobs…”
“Retail closures hit record…”
“Walt Disney to lay off 28,000…”
“Airlines brace for mass layoffs…”
And yet…
“J.P. Morgan predicts a 10% rally for the S&P 500…”
“Stocks rally, driven by banks and energy…”
The patient feels light-headed, and his skin is cold and damp… and yet he keeps at it. He hopes it will pass, just like it normally does. He hopes it’s just a distraction that will go away with the next big bite.
It sure could.
More often than not, that’s the case.
But every once in a while, things take a turn for the worse. The patient stiffens up like a board and splashes headfirst into the water.
Changing Paths
The question everybody is asking is… What to do about it? Do we get out of the water and miss all the fun? Do we dismiss the downside and act as if it’ll all blow over?
For us, it’s the question of a lifetime.
Get it right and things could work out quite well. Get it wrong and we could drown with nobody around to pull us out.
The folks who stayed out of the water following the ’08 crash certainly know what’s at risk. They believed the end to be near. With each new headline, they pumped their fist and prepared to be proven right.
Stocks doubled… then tripled… up… up… and up some more.
And now we’re on the record telling you to get ready for Dow 100K. It’s coming. And it will come fast.
But it’s not great news.
Markets will zoom not because of economic innovation and prosperity.
No. This prognostication is about funny money and all the business that comes with it.
Interest rates have died, the folks at the Fed tell us. Money will be cheap for a long time to come, they promise.
Worse yet, they boast that the unconventional is now the conventional.
We worry most folks aren’t listening to those words. We fear most investors are doing what they’ve long been told. They’re still doing the conventional.
That’s trouble.
We don’t need to remind you that the mortgages reaching the end of their lives today were written in 1990… when the average rate was above 10%.
As rates are now at 3%, we pity the fool who never bothered to look around and see he could do things much, much differently.
If he stayed the course he plotted in 1990, he went to a bad place – a land where the worried citizens wonder if things could have been better.
Introducing: Modern Asset Portfolio
That’s why we did something special for our readers this week. We sat down and penned a fresh way of thinking about the markets. We stuffed it in an envelope and mailed it to our Manward Letter subscribers.
The pages we wrote on the subject outline what’s gone wrong and what to do about it.
They show why old techniques were right and were once worthy of their praise.
But just as the fella paying 10% on his mortgage has realized, things have changed. With the death of interest rates, the market flooded with trillions in freshly printed money and central banks buying right beside the retail investor, the old rules of investing seem as modern as drilling a hole in our skull to relieve the pain of a headache.
Our idea centers on what we call “modern asset portfolio” (MAP) theory. It’s an investing concept that doesn’t hinge on shaky correlations and historical averages. Those ties have been snapped.
Instead, it hinges on the thing that matters most… those dead and dying interest rates.
The theory is simple.
Instead of keeping the lightheadedness and clammy palms to ourselves, hoping it will all just go away… MAP theory focuses on what’s causing the issue and adjusts accordingly.
With it, we no longer have to depend on a portfolio that’s pulled down by counterweights that never seem to do their job. Our plan cuts them lose and finds protection from what ails us, with, as the name implies, modern assets.
If you’re asking that question of a lifetime… or worried that things aren’t quite right… but don’t want to climb out of the water… pay attention to what we’re writing.
We’re quite excited about what we’ve pulled together.
There’s more to come.
For now… heed that voice in your head. If things don’t feel right, don’t just stand there.
Take action.
The river is fierce.