AAII San Francisco Meeting Saturday March 20, 2010 Presented by: Tom Kopas Since 2000 a “Lost Decade” For Investors… Are you Prepared for Another “Lost Decade?” The Secular and Cyclical Outlook for Stocks, Bonds, and Commodities
Turner Capital Group
19-years/69% decline/ 6 recessions 19-years/67% decline/ 4 recessions 16-years/62% decline/ 4 recessions 10-years/43% decline/ 2 recessions
Turner Capital Group
Turner Capital Group
Price Moves in Excess of 25%
Key Points: Secular Trend for Stocks Long Periods of Alternating Good and Bad Performance Secular Trends Change at Extreme Valuation Levels Currently Halfway through our 4 th Secular Bear Market Be Aware of the Secular Bull Market for Commodities Capitalize on Cyclical Stock Market Opportunities (Today) Understanding Secular Environment is Key to Success
Financial markets are linked in a logical, rational, and sequential relationship to business activity. Financial markets have been tracking these business cycle sequences for over 150 years. Pring Turner Investment Approach
Turner Capital Group 9
Turner Capital Group 9
Key Points: Investing Around the Business Cycle Markets are Linked in a Logical, Rational, Sequential Relationship For over 150 Years, Markets have Tracked Business Cycle Sequences During Secular Bear Markets Economy in Recession More Often Pring Turner Organizes the Business Cycle into 6 stages Just Entered Stage 4 Good for Stocks and Inflation Sensitive Securities Bad for Bonds Business Cycle Drives Profitable Asset Allocation Decisions
Turner Capital Group
(Inverted) Turner Capital Group
Turner Capital Group
Inflation Barometer is at 100%. Turner Capital Group 910
Key Points: Secular Trend Bonds/Commodities Bonds Have Been in a Secular Bull Market for Almost 30 years Bond Owners Beware: Secular Trend is at a Critical Juncture Cyclically Bonds are Vulnerable to Interest Rate and Inflation risks Small Rise in Interest Rates can Lead to Significant Losses in Bonds Commodities in Secular Uptrend Adds to Risk in Bonds Opportunities in Inflation Sensitive Securities
Tactics to Protect and Grow Wealth ClassSecularCyclicalTactics StocksBearBull Use Business Cycle to Tactically Allocate Assets Inflation Themes are in Secular Bull Resourced Based, Foreign-Emerging Markets Quality with International Exposure Income Producers BondsBear?Bear Review and Reconsider Risks Lower Bond Allocation Reduce Bond Maturities Set up Short-term Bond Ladder Hedge Bonds with Inflation Sensitive Securities Inflation Sensitive Assets Bull Favor Natural Resource Companies “Chindia” Theme, Global Resource Demand Precious Metal Exposure Resource Based Countries Canadian Royalty Trusts March Turner Capital Group
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