Westcore Fixed Income & Bond Market Interview

Dear Mr. Market:

th-3We certainly spend a lot of time writing to you about the stock market and all the twists and turns it brings investors. Today, we have the pleasure of mixing things up a bit as we dive into something far larger and more intricate than the stock market; we’re going to talk about the bond market!

On a recent trip out to Denver, CO My Portfolio Guide had the opportunity to meet with Troy Johnson, CFA and Director of Fixed Income Research at Denver Investments. We were able to ask him and his team several questions about the bond market and how they’re navigating it in these interesting times.

My Portfolio Guide: First and foremost, thank you very much for making yourself and your team available. As you know, we own positions in the Westcore Plus Bond Fund as well as the Westcore Municipal Opportunities Fund. We understand your team was awarded a Lipper Award. Without necessarily giving us a pitch on your firm, could you briefly expand on the recent accolades?

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Westcore: The Westcore Fixed Income funds won the Lipper Fund Award for best fixed income small fund group for the three-year period ending November 30, 2016, placing first out of 74 eligible fund families. The award was granted based on Lipper’s measurement of risk- adjusted returns across our multiple fixed income fund offerings. We believe that winning the award affirms the soundness of our approach across multiple strategies as well as the hard work and talent within our fixed income team.

My Portfolio Guide: Excellent, and congratulations on the awards and success. Related to this, could you share your opinion on what makes your firm or approach different than some of the larger bond shops?

Westcore: We utilize an investment approach that emphasizes income and security selection rather than a focus on trading. This generally results in a heavier weighting towards credit oriented issues that offer enhanced income. We recognize rigorous fundamental research is a necessary component of such an emphasis and differentiate ourselves within that process in the following manner: Continue reading

Fear Sells…until you stop buying it

Dear Mr. Market:0

We wake up to you every day. Once the morning cup of coffee is poured, whether intentional or not, we constantly digest information for the next 16 hours. Most of us check our email, read and/or watch the morning news, glance at social media, and then mix in conversations with other humans that have almost exactly the same patterns. Does this type of routine parlay itself into one that sets you up for making good investing decisions?

NO…most definitely not!

Let’s take for example yesterday, June 8th. To what could have been just another Thursday certainly turned otherwise; yesterday even had it’s own name…”Comey Day”. Millions watched ex-FBI director James Comey testify in front of the Senate Intelligence Committee. There were literally “watch parties” held at bars, restaurants, and even yoga studios all across the country.

Regardless of your political leanings…take off your partisan hat for just a minute and look back 24 hours ago. For those who busted out the popcorn and awaited impeachment news or a massive decline in the stock market, you were once again served a huge Nothing Burger. The media hype did what it’s good at and drove you to tune in. Who really won yesterday? Trump? Comey? Lorretta Lynch? Russia?

Cable TV networks are enjoying banner years. Fox News viewership is 40% higher than a year ago and CNN is enjoying about 60% higher ratings over this same time period. This sad but very real episode of reality television is captivating America and driving people to make some rash decisions.

Fast forward to this morning and one of the first headlines we were treated to was this: JIM ROGERS: The worst crash in our lifetime is coming

Feel free to view the article here or read the full transcript via this link.

Should you listen to legendary investment guru Jim Rogers being interviewed by Henry Blodget? Who are each of these brilliant minds with a platform that has your eyes, ears, and full attention?

First and foremost, Henry Blodget is the CEO of Business Insider. Before heading up what is now the fastest growing and largest business news site on the internet, Blodget was a “top ranked Wall Street analyst”. STOP!

For those of you with short memories, Henry Blodget was head of Merrill Lynch’s global internet research team during the dot-com era and was charged with civil securities fraud in 2003. Blodget is now permanently banned from involvement in the securities industry.

Now let’s educate ourselves on who Jim Rogers is. If you don’t look too closely under the hood you’ll just assume he is as portrayed…a sharp bow tie wearing guy who is introduced as a “guru, renowned investor, author, and financial commentator”.

The reality of it all is that guys like Jim Rogers sell fear…and they’re good at it.

He uses a few polished sentences surrounding one or two pieces of economic data or personal observations and then sensationalizes it all to get you scared. It’s not hard to get people thinking about everything that is wrong in the world and when you add a media platform with a 24/7 news cycle, smart guys like Jim are making money off your fear.

Jim Rogers has been wrong for decades. Over the past few years he has been predicting a massive recession. In June of 2011 he said the global economy would be facing another epic recession. We saw him in person later the next year speaking at an investment conference and he said the U.S. is approaching a financial crisis worse than 2008. The next two years he pitched the same headlines and warned his followers of imminent disaster.Fear-Sells-Button-(0983)

Like a broken clock he’ll eventually be right but if you’ve been listening to him or acting on other fear pitches you may be out of money by that time. What’s more amazing to us than wrongly predicting the same thing every year is being offered the opportunity to continue doing so…

Have a great weekend!

REITs: How to Potentially Increase Portfolio Returns without more Risk

Dear Mr. Market

th-1Raise your hand if you would like the opportunity to increase the returns in your
portfolio without taking on more risk? There is indeed a way to help accomplish this and it’s not just by balancing between the two major asset classes of stocks and bonds; take a look at the third largest asset class there is: REITs (Real Estate Investment Trusts)

Most investors have little to zero exposure to REITs and they may be surprised to learn how important they can be to a healthy portfolio. This article will give you a better understanding of why adding REITs into your portfolio could improve your diversification, dividends, and ultimately your portfolio performance.

What are REITs and why use them? Continue reading

12 year-old baseball player helps Seal Beach financial advisor with 3 home runs!

Dear Mr. Market:

We typically write you letters to chew the fat about the stock market, the economy, and educational snippets on investing. Once in a while, however, it’s nice to learn about what goes on behind the scenes of a financial advisory firm. This past week, a truly special series of events transpired so we had to share them with you.IMG_0171

A 12 year-old baseball player, who may eventually become a financial advisor like his father, found a way to at least begin advertising for the firm! The young ballplayer brought attention to the My Portfolio Guide banner hanging in left field by hitting three home runs in one game! The magical moment has been published in several Southern California newspapers and young Lance can also savor the memory as it was all captured on video.

Click here to see the 3 homeruns on YouTube!

Lance Pixa has always been a solid baseball player with some notable accomplishments, like pitching two complete game no hitters, but what he did over a string of four days doesn’t happen too often at any level. He has had one of his best seasons this spring and last Sunday Lance hit his first over the fence homer at LAYB (Los Alamitos Youth Baseball). What made the moment more special was having his best friend, CJ Brown on first base when the ball left the yard and he was the first one to greet him at home plate. The following game, Thursday 4/6/17, Lance was up with CJ on first base again. This happened three more consecutive times and Lance hit 3 homers over the same part of the fence!IMG_0192

Lance Pixa plays for the LAYB Bronco Red Sox during the spring. This is also a special year for the league as they will be hosting the Bronco World Series in August. Along with this team Lance also plays for the OC Invaders which is a travel baseball team based out of Seal Beach. He and his teammates will be headed to Cooperstown, New York this summer to play in a national tournament and visit the baseball Hall of Fame. Lance lives in Seal Beach and is a 6th grader attending St. Joseph in Long Beach.

When asked what he wants to do when “he grows up”…the answer has changed over the years. As a little boy he used to tell people that his dream job was to be a tiger feeder at the zoo but “if that didn’t work out his backup plan would be to play on the Angels”. We won’t be one to kill dreams (or categorize them!) but for now this young man certainly created a memory that will last a lifetime. His father, Matt Pixa, will also not complain about the return on investment with all the attention the My Portfolio Guide banner received this past week!

March Madness: Final Four Investing Bracket 2017

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Dear Mr. Market:

Is your bracket already busted? This year’s March Madness tournament opened up with very few upsets until this past weekend. Much like the stock market, we see a similar trend happening right now. What follows is how we see things panning out but first, here’s a little background on how one of the most famous sporting events in the United States correlates to the investing landscape.

Seven years ago we became the first Registered Investment Advisor to use the NCAA basketball tournament as a way to show our readers a forward-looking view on the stock market! We break down and assign each of the four “regions” with an asset class and then pick teams (companies) that we think have the best chance at doing well relative to others.

CLICK THE LINK TO VIEW OUR Final Four Investing Bracket Picks 2017

Large Cap

Last year started off much differently than 2017 and as we wrap up the first quarter …some trends are emerging while others continue. If you eyeball the overall theme of this years bracket it will become clear that we’re picking some stocks that should continue to do well under the Trump administration. Whether you love him or hate him, ever since Donald Trump assumed office, the stock market has risen. The proverbial “Trump bump” is real and while we personally believe he needs to stay away from Twitter, there is no question that the stock market and certain economic sectors are primed to perform. Continue reading

6 Steps to overcome Investing Paralysis by Analysis

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Dear Mr. Market:

It sure seems as though you’re stuck in a rut. Just a few weeks ago Wall Street traders were donning embroidered hats with “Dow 20,000” on them in anticipation of reaching this stock market milestone. As investors approach proverbial milestones, their thinking and decision making process often begins to falter. How was your mindset when the Dow Jones cracked 14,000 in October of 2007 versus not too long afterward when it was at 6,600 in March of 2009?

The number of investors that are still sitting in cash from way back then is mind boggling! Do you take a long time making decisions? Are you worried about making the wrong choice with your investments and therefore don’t take any action? Do you analyze all the options but later on kick yourself seeing that so many opportunities have passed you by?

If any of these questions resonate with you, it’s likely that you suffer from paralysis by analysis! Here are a few steps to consider and break free of this condition: Continue reading

Dean Foods: What did Santa wash down his cookies with?

unknown-4Dear Mr. Market:

Normally we write you a series of letters about the stock market or the economy. As we wrap up 2016, however, we decided to share an article that was recently published on Seeking Alpha. The proverbial ‘Santa Claus rally’ seems to perhaps have taken place before Christmas this year but what opportunities might there be going into 2017?

This interview reviews questions around a stock we’re interested in adding to some portfolios; Dean Foods (DF). Enjoy!

Summary

  • Despite trading at 52-week highs (and ~30% gain over the last three months), DF is still undervalued relative to peers.
  • As the clear market leader in fluid dairy, DF enjoys significant economies of scale – a critical advantage in a commodity-related business.
  • “Skating to wear the puck is going” with leading position in healthy dairy products such as TruMoo.
  • Friendly’s ice cream acquisition was immediately accretive, highly complementary, and further cemented its growing position in branded ice cream.
  • Takeover rumors that surfaced in October provide a floor for the stock.

Continue reading