Contrarian’s Dream

THE MARKETS

Is it a contrarian’s dream come true?

Contrarian investors like to buck the trend.  They buy when other investors are selling and sell when others are buying.

Last week, Bank of America’s monthly survey of 225 global asset managers, who are responsible for $645 billion in assets under management, found the managers were almost fully invested, believing the economy will strengthen in 2021, according to CNBC. 

The survey showed asset managers’, “…cash levels at the lowest since March 2013, global equity allocations at a 10-year high, and a record number of respondents reporting taking a ‘higher than normal’ level of risk,” reported Randall Forsyth of Barron’s.

Asset managers’ optimism are a result of central banks’ monetary policies, governments’ fiscal stimulus programs and other positive signs of economic recovery.

• Central bank actions are supporting low interest rates. Low interest rates encourage economic growth by making money inexpensive for companies and individuals to borrow. In the United States, the real (adjusted for inflation) 10-year Treasury yield finished last week at -0.80 percent, according to the U.S. Treasury.
• Government stimulus is flooding world markets with cash. “Although percentage cash levels held by investment managers are falling, they are not falling fast enough to keep up the rapid expansion of money still flooding the system…U.S. household savings at the end of 2020 were still almost $1 trillion above pre-COVID levels…,” reported Mike Dolan of Reuters.
• Economic recovery is gaining steam. While the virus continues to be a risk, last week much of the economic data in the United States was positive, with retail sales exceeding expectations and manufacturing holding steady, reported Nicholas Jasinski of Barron’s. Economic growth is forecast to be about 6 percent in 2021, reported Reuters.

Last week, yields on 10-year Treasuries moved higher and the Dow Jones Industrial Average advanced.  The Standard & Poor’s 500 Index and Nasdaq Composite both finished the week lower.  

BLACK HISTORY MONTH.  Throughout the month of February, people in the United States celebrate the achievements of Black Americans.  President Gerald Ford started the tradition in 1976 to “…seize the opportunity to honor the too-often neglected accomplishments of Black Americans in every area of endeavor throughout our history.”  Test your knowledge by taking this brief quiz.

1. In 1968, she became the first black woman elected to Congress. Four years later in 1972, she launched a campaign for the Democratic Presidential nomination with the slogan: Unbought and Unbossed.  She once said, “If they don’t give you a seat at the table, bring a folding chair.”  What was her name?
   1. Yvonne Brathwaite Burke
   2. Shirley Chisholm
   3. Barbara Jordan
   4. Gwen Moore

2. Eugene Bullard was the first African American pilot to serve in the Armed Forces. He worked as an air gunner for the French Army and served in two American wars.  Which wars did he serve in?
   1. World War I and World War II
   2. World War II and Korean War
   3. Korean War and Vietnam War
   4. Vietnam War and Grenada

3. This black American author has won an American Book Award, two National Book Critics Circle Awards and received the MacArthur Genius Grant, as well as being shortlisted for many other awards. The author described the work this way, “When you write, it's like braiding your hair.  Taking a handful of coarse unruly strands and attempting to bring them unity.”  What is the author’s name?
   1. Candace Carty-Williams
   2. Marlon James
   3. Edwidge Danticat
   4. Ta-Nehisi Coates

4. Alabamian Percy Julian was not allowed to attend high school but he graduated Phi Beta Kappa and valedictorian of his class with B.A. from DePauw University in 1920. He also earned a Master’s Degree from Harvard University and a PhD from the University of Vienna… Historically, he is regarded as one the most influential leaders in his field.  What was his field of study?
   1. Law
   2. Medicine
   3. Chemistry
   4. History

Quiz Answers:

1. B – Shirley Chisholm
2. A – World War I and World War II
3. C – Edwidge Danticat
4. C – Chemistry

WEEKLY FOCUS - THINK ABOUT IT

“No person is your friend who demands your silence or denies your right to grow.”

--Alice Walker, American novelist and poet

Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Treiberg Wealth Management, a registered investment advisor and separate entity from LPL Financial. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.  The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. This newsletter was prepared by PEAK. Past performance.