Views from the Crowsnest Nov 21 2018

“If you can keep your head when all about you
Are losing theirs and blaming it on you,”

Welcome to this special edition of Views from the Crowsnest on November 21, 2018. The quote above is the first two lines of Rudyard Kipling’s classic poem, “If.” It fits today, in ways both obvious and subtle. In these moments, our higher-order executive functions become more important than ever.

Rarely are we in the midst of historic events with a conscious awareness of their significance. Today is one of those rare occasions when we witness the collision of trends and forces so obviously converging; cinematic in their scope, with life-changing consequences for those directly in their paths. We knew it would eventually come to this; it had to. And then there are the ripple effects on the rest of us.

Exact outcomes are still unknown, but the meta-trends make the overall path inevitable, unchangeable and necessary, by force of nature. Such is the nature of recurring cycles, in politics, economics and markets. This is the just and necessary consequence of all the decisions that have led us to this moment.

I refer specifically to the challenging equity market machinations since September, but more broadly to the tectonic events unfolding in and around Europe. The cradle of western civilization is bringing us timeless lessons of the immutable laws of nature: physics, power, populism, psychology, economics, envy, manipulation of the many by the few, and the eventual awakening of those charged with decision-making authority. And the uncovering of secrets long kept through convention, personal utility, and fear.

As if “magically,” Martin Armstrong’s Economic Confidence Model (ECM) once again targeted today (2018.89) as a key date in the future of our institutions and the societies over which various levels of influence and control are exercised. Today is a rare “Pi Day” ,served up for all to witness and ponder. As Marty likes to say, “There’s order within chaos,” but we need to transcend the noise to understand the true big picture before responding to the noise and distraction on the ground. The imminent release of the Socrates Trader-Pro Level will be warmly welcomed when it happens.

Having attended the World Economic Conference 2018 in Orlando – my 4th – followed by a couple days of coastal relaxation and celebration, today we witness major events unfolding with Italy and the EU, the UK and its inept attempts at breaking away from the EU, and what will be a resumption of the most hated bull market in stocks ever…literally by force of nature.

Human history is a rhythmic poem describing the desire for liberty offset by the need for structure. Jordan Peterson describes this as the battle between Chaos and Order. Sometimes the weight of too much order becomes unbearable. Sometimes an unbalanced economic relationship reaches it inevitable end. Think Italy and Brexit.

These tectonic, structural changes lead to fear, uncertainty and doubt around the world. When market makers, traders and high-ranking decision makers get caught up in the drama and tension of the immediate situation (i.e. they LOSE their heads), we all feel the impact via declines like those which have recently buffeted our financial portfolios. This is temporary, not permanent. We know because we have the gifts of perspective from those whose systems and experience have washed away (fear-based) emotional REACTION, and given way to wise and prudent RESPONSE.

What does it all man? Capital flees risk and seeks opportunity. The bigger the systemic risks (Europe), the more violent – and unsettling – the temporary dislocations are, even as capital arrives on safer shores (U.S.). We are all more closely wired than ever before. The downside is a loss of true connection, but that’s a story for another day.

When we look back, we know that market panics pass rather quickly despite being so very painful when we’re swirling in their midst. This too shall pass. Thanks to wise counsel and humble recognition of those who know something we don’t, we remain steadfast in our view that this – the longest and most hated (ever) Bull Market in stocks, especially in the U.S. – remains intact.

There is major support not far below current levels. Even if we test these support levels, the tests will be temporary. Our Portfolio Managers hold some cash for buying bargains, non-correlated debt instruments for diversification and stability, and great companies trading at (or slightly below) their intrinsic values. They remain calm, focused and patient…ready to act decisively when fear is highest and risk therefore lowest.

To our Clients Families we suggest adding to your portfolio if you have cash available for longer term horizons; essentially be an Opportunist. Otherwise, do nothing right now because it would be financially self-destructive; impulsive moves now are giving into fear which turns us into Victims.

We have your back. We are keeping our heads. I recommend reading the entire text from Kipling by clicking here.

Patience and Discipline are accretive to your wealth, health and happiness – so focus on these.

Cheers,

Andrew H. Ruhland, CFP, CIM
Founder, Integrated Wealth Management
t: 403-517-2234

From the Crowsnest November 2018

Welcome to the November 2018 edition of Views from the Crowsnest. Despite less than six weeks elapsing since the last edition, a tremendous amount has happened. Markets, politics, and economics have dominated our various screens.

The civility of public discourse has reached new lows, equity markets appear to have established some interim lows, and the noise from the US mid-term elections have reached 150% of tolerable levels. Thank goodness tomorrow is Election Day. Perhaps we can return to some level of normalcy, or am I too optimistic?

Just before every major election, the hysteria reaches deafening levels, and this undoubtedly unsettles those involved in capital markets. While the US economy remains in juggernaut mode, broader US stock valuations were a little stretched – and some sectors, especially big tech, were very optimistically priced.

Canadian stocks were much more reasonably valued prior to the mid-October volatility, yet still declined with US indices. Capital is flowing out of Canada, at least as it relates to major investments in our resource sector, thanks to our exalted political leaders. That’s not a political statement; it’s a summary of current reality.

Pullbacks within uptrends always challenge our fears. As we climb the proverbial wall of worry, stumbles and setbacks are inevitable; they’re also necessary and downright helpful for patient and disciplined investors. Though unsettling, declines like the one we recently experienced allow our portfolio managers to buy back into full positions they had previously trimmed during strength. Sometimes entirely different and better upside opportunities arise, and pullbacks/corrections provide the cover for our calm portfolio managers to buy these companies from panicked sellers. It’s all about temperament.

While we certainly didn’t plan it this way, the timing of our Straight Talk for Retirement Success workshops was serendipitous. The theme was how to bullet-proof your retirement plan in advance of the next financial crisis, and still generate solid returns in the interim. I focused on a series of very specific strategies that help to generate incremental positive returns AND reduce downside market volatility, as well as how to create a contingency plan in advance of the next financial crisis. It was all about how to avoid being the bug on the windshield yet again.

These workshops were very well-attended, and based on numerous requests from our newsletter readers and the MoneyTalks audience, we decided to record the last session here in Calgary.

You can Click here to watch the recording for free.

I encourage you to download/print the self-assessment form and to realistically assess your current strategies versus those I speak to in the workshop. If you’d like to request a confidential review of your current portfolio and retirement plan, simply reply to this email.

You’re also welcome to forward this note onto others who may have been asking you what you’re doing to protect and grow your portfolio. We know that many people are unsettled by the current environment and are looking for practical and realistic solutions, so perhaps our workshop might be helpful for them?

Speaking of unsettling, the current hyper-partisan screeching around the US mid-term elections is almost over. Thank goodness. Will the “Blue Wave” of Democratic dominance actually manifest itself? Earlier in the year, those on the Left were chortling about taking back control of both Houses of Congress. Not much mention of anything positive they might do with that power, curiously enough. They’re sounding much less confident in recent weeks, though.

Today it appears much more likely that the Republicans will hold – perhaps build – their slim Senate majority, and the Democrats look poised to tip the balance in their favour in the House of Representatives. If memory serves me correctly, the Democrats need to pick up 23 more Congressional seats to gain control. This is really only ever about control, i.e. power. It’s the same for both sides.

Many of these “toss-up” seats are within the “normal margin of error” for pre-election polling, so who knows? And who really knows what the true margin of error is for polls anymore? Does the obvious social stigma of voting for Trump (being smeared as racist, misogynist, homophobe, Islama-phobe, bigoted redneck, white nationalist, transphobe, etc.) cause some people to conceal their voting intentions from pollsters?

Given the level of smearing, it wouldn’t shock me if many people would prefer to publicly disassociate from Trump. He’s now seemingly responsible for all political violence in America – at least according to every media outlet left of Fox News, which is to say > 80% of media. Decent people (i.e. most of the population) abhor the ideas that Trump supporters are accused of espousing, so why risk being labelled as one of these “Deplorables?”

The 2016 election of Donald Trump surprised all the mainstream pollsters, and stunned the mainstream media pundits on election night. Did social stigma contribute to the polls being dead wrong? The pain of losing an election that was supposedly easily won was on full display in the weeks afterward. And apparently these are still open wounds for those on the “Loud Left” as evidenced by their vitriol. Losing power when you were already making plans must have been devastating.

Naturally, the folks on the “Loud Right” are matching or exceeding the rhetoric on the Left, generating their own talking points – some accurate and others caustic and/or incendiary – and the vicious circle of partisan politics continues its escalation. Neither party impresses me, despite the fact that I am a small-c “conservatarian.”

In my September newsletter, I mused about whether or not the Democrats had overplayed their hand with the accusations of then-Supreme Court nominee Brett Kavanagh. It felt like a carefully planned last-minute bombshell to both derail the confirmation process itself and to also gain the upper hand in tomorrow’s mid-terms. They failed on the first objective. Jim Dines famously said, “Over-efforting creates countervailing forces,” and that’s what it felt like to me. No one is ever right 100% of the time and only time will tell if my intuition was accurate on this subject. We’ll know shortly.

Whatever the electoral outcomes are, my deepest hope is that we can get back to reasonable conversations about important subjects that require actual solutions. I know that many politicians would rather perpetuate the problems (as galvanizing issues) than find and implement effective solutions. If there are no problems left to solve, then how to attract votes? The current discourse is socially toxic and has become quite literally deadly. Real leadership on this matter is necessary to re-stabilize volatile America. Leadership from everyone involved.

I’m looking forward to attending my fourth World Economic Conference in Orlando. Martin Armstrong’s insights and his computer’s unbiased analysis will be very helpful in the volatile times ahead. Hopefully we’ll also hear some good news in respect of the full Socrates system getting launched. Everyone’s patience has been tested by the delays, and it would be nice to be able to move forward.

Patience and Discipline are accretive to your wealth, health and happiness; so focus on these.

Cheers,

Andrew H. Ruhland, CFP, CIM

Founder of Integrated Wealth Management Inc.

Views from the Crowsnest, September 2018

In this issue: adapting to today’s faster pace, Trump, Trudeau, voices of reason, keeping our eye on the financial ball, Socrates update, and Straight Talk for Retirement Success workshops.

Trigger warning: this newsletter contains sharp criticisms and politically incorrect opinion. The truth hurts when it ought to.

Adapting to today’s frenzied pace is challenging, lest we also become frenetic. The gap since my last full Views from the Crowsnest newsletter is the longest ever, as I’ve struggled with finding a balance. The inputs have been almost all positive (presenting workshops in 5 cities, improving nutrition & exercise habits, a little R & R, welcoming numerous new clients to our firm, walking my eldest daughter down the aisle, preparing for our fall workshops, etc.) but there’s been little time left to cobble together this missive.

I’ve also been struggling mightily with how to select, filter, decipher and integrate the “outrage tsunami” that is today’s news cycle. The vitriol in today’s media is profoundly disheartening, especially if you welcome vigorous and intellectually-honest debate of important issues. I’m deeply disturbed that the Left has degraded to the point where the typical response to an argument or person they find “problematic” is yelling, smearing, lying, de-platforming, and Twitter-mobbing. And some on the right go down there, too.

What ever happened to dismantling an erroneous argument with facts? This You Tube video is a great summary of why so many “classical liberals” have left the Left in favour of being part of the reasonable conservative center. Dennis Prager does an excellent job of distinguishing between the Left and liberals in this short video.

As someone with a lot to say about current events, one of the “outlets” I’ve adopted is posting frequently on LinkedIn, as well as starting a Facebook page for IWM. We’ll see how long it takes for me to get banned by Mark Zuckerberg for posting real news stories. I don’t wear gloves for these platforms, and take incredible pleasure in relentlessly pointing out the absurdity of the mainstream media narrative and their favored characters. I invite you to find and connect with us and FOLLOW me on LinkedIn (Andrew Ruhland) and Facebook (Integrated Wealth Management).

Twitter is too fast-paced, mean-spirited and left-leaning for me to even bother. Bare knuckle fighting is one thing, but fighting fairly isn’t the culture of Twitter… they’re more brass knuckles, bike locks and garrottes. I wonder how quickly Twitter would crumble if Trump found an alternative? Perhaps Peter Thiel might consider building a platform to rival Twitter, YouTube and Facebook?

Speaking of Trump, since everyone is doing so ALL THE TIME, he has become THE obsession of the Left. When people ask me if I’m pro-Trump or anti-Trump, my answer is “yes.” I hate false choices. Let’s face it, Trump does and says many VERY stupid things. Chief amongst the stupid things is his tariffs and trade war baiting. Politicians always think of tariffs in terms of jobs saved or created while ignoring the cost for consumers; after all, tariffs are collected by governments and paid for by consumers through higher prices. This is clearly Trump throwing red meat to blue collar voters in the rust belt swing states (Pennsylvania, Ohio, Michigan, and Wisconsin). Imposing tariffs is one campaign promise that Trump should NOT have followed through on.

Trump also does and says some VERY smart things, though every media outlet left of Fox News refuses to admit anything positive. Trump is “such an idiot” that he has managed to reduce the Unemployment Rate (3.9%) below their GDP Growth Rate (4%). With “idiots” like this in the White House, who needs fancy geniuses peddling ineffective policies? Could Obama maybe coach Trump on how to charismatically deliver an extremely well-written epic speech? I suggest you read it and think of someone else delivering it eloquently and skillfully.

Trump is really a centrist with blue-collar populist appeal, and the mainstream media hates the fact that he dominates almost every news cycle, so they have to talk about him…which makes them hate Trump even more. It’s kind of pathetic, actually. And it’s endlessly funny, but dangerous.

Trump dominates the center on most matters, and CNN – which used to be only slightly left-of-center – continues to crumble; MSNBC is picking up former CNN viewers who want a hard-core leftist filter on everything, and Fox News is growing faster than MSNBC. They ALL have their biases, and what irritates me is that you have to invest additional time to hear both sides of any particular issue and try to piece together a fact-based conclusion.

Given that roughly 70% of people get most of their news from Facebook, public perceptions are being aggressively pushed FAR left. Starting at age 6 all the way through Graduate Studies, students are being taught that socialism is good, that gender is a “social construct,” and your group identity is the most important thing about any person, we have “Trouble in River City.” This short video is excellent!

It will take time to reverse the decades of brainwashing, but it absolutely must be done. The continued stability – nay existence – of our prosperous, free, liberal, open western capitalist culture is at stake. That’s not hyperbolic, but it is scary, so we need to be practical, intelligent, articulate, and absolutely resolute in this ideological battle. The battle is to maintain an open conversation between the reasonable left and the reasonable right in pursuit of a certain homeostasis that I’ll call “The Reasonable Center.”

I’ve long been fascinated by the outrage culture of mainstream media and about 18 months ago started devoting some of my personal learning time to understanding this phenomenon. I’ve explored the works of many credible commentators, pundits, academics and philosophers. Here’s the Executive Summary: the tendency for those on the left – personality wise – is to be more expressive about their political views (conservatives tend toward practicality), to experience a much wider range of feelings (emotional lability) versus those on the right; and to prioritize group identity over individuality, whereas those on the right prioritize personal responsibility and the sovereignty of the individual. When conservatives see unequal treatment they want to stop it; those on the left wasn’t to reverse unequal treatment, which is the basis of their obsession with identity politics.

Those on the Left also tend to be easier to “trigger,” which I candidly admit is extremely fun to watch; it’s a hell of a lot funnier than almost every “comedian” out there. Trump does this every single time he Tweets. For those with time, this video is an excellent explanation.

Meanwhile, back here in Canada, we are seeing the catastrophic results of our electoral choices. “Rachel-come-lately” Notley and her merry band of adolescent socialists have worsened Alberta and Saskatchewan’s economic reality. They didn’t cause the plummeting oil prices that precipitated our current situation, but they’ve managed to make it MUCH worse by several orders of magnitude. They’ve hired massive numbers of provincial employees to shore up their union support…exceptionally stupid fiscal policy when Alberta is hurting so badly.

Only recently has the Premier’s office started acting like leaders who support those who fund government-delivered services. Prior to the UCP formation with the media-savvy Jason Kenney at the helm, the NDP bad-mouthed our core industry, demonized those who dare to disagree, and passively aided and abetted the B.C. enviro-radicals and their political pawns “running” the federal government. The NDP’s desperation is now on full display as they launch attacks on Kenney and the UCP related to all things “LGBTQIA…” Hopefully, Kenney is wise enough to NOT get baited by the Left on this one. The CBC cannot feature enough stories painting the UCP as homophobic, sexist, racist, transphobic, etc.

This brings us to Justin Trudeau. Argghh! Let me pause, catch my breath and distill what I think of him into a few words: embarrassing, narcissistic, intellectually shallow, immature, completely out of touch with reality, brainwashed (identity politics and socialism), and yet extremely “well managed” by his closest handlers, Gerald Butts primarily. Justin Trudeau makes me look back fondly on the bumbling Jean Chretien. At least we had Paul Martin running Finance.

For more revelations on Mr. Trudeau, please add me to your LinkedIn network (and FOLLOW me) or join our Facebook page. And then share our posts liberally, NOT Liberally. Trudeau has the CBC, Global, CTV, the Globe & Mail and the Toronto Star on his side…let’s get social media working for clear-headed governance!

Our Peter Pan Prime Minister and his team have awakened to the fact that they’ve mismanaged every portfolio under their control. In a curious but shrewd pivot, it looks like they’ve decided to wage their next campaign against Donald Trump, since so many Canadians hate Trump – and not many people know who Andrew Scheer is anyway…literally.

The federal Conservatives are raising lots of money, and starting some early campaign ads during sporting events. Hopefully some of their money will be used to help Mr. Scheer grow a spine before the writ is dropped. Canada is ready for someone who isn’t obsessed with every camera, someone with intellectual substance, and maybe a practical economic plan…as distinct from “budgets that balance themselves,” a series of obsessions with plastic straws and other red herrings, divisive identity politics gamesmanship, and just letting our “gender-balanced” economy “grow from the heart outwards.” The grown-ups in other countries openly mock our current Prime Minister, but their politically correct fancy people humour him by letting him sit at the adult table. Scroll down below the video of Trump’s UN speech

All of this acerbic pre-amble is actually relevant to your financial wellbeing, so hopefully you’re still reading. I don’t care if you hate Trump and love Trudeau, Notley and John “Horrible Horgan.” The fact is that you can ignore economics as much as you like, but economics won’t ignore you. The reality is that Trump’s fiscal and economic policies have strengthened the already stable US economy and their equity markets reflect that. Canada has terribly misguided political leadership and our country is living with the consequences of our leadership.

Europe is in turmoil from Brexit (or not) and facing the very real possibility of the end of the European (utopian) project: Italy, Hungary, Sweden, Czech Republic and Poland are all extremely unhappy with being forced to accept Merkel’s open borders policies. I’ll take the economic and geo-political substance of the inarticulate, bumbling and unfiltered Donald Trump over the clowns we have in power in Alberta, B.C. and Ottawa…8 days out of 7.

My primary near-term concerns are based on trade wars and the US mid-term elections, with the media in full-blown hysteria over anything and anyone that Trump has done or recommended. Have the Democrats leaned too far over their skis, thus awakening the Republican voters who could stop the flip of the House and Senate to the Democrats? Only time will tell.

Our job is to keep our eyes on the “financial ball” amidst all the chaos. And to be logical, patient, disciplined, wise, prudent and effective. We’re staying focused on what’s working and avoiding what’s not. It’s boring an effective. We bring order within the chaos, and we’re extremely good at it. I’d venture to say we’re radically competent; not perfect, but radically competent. And I’m much nicer in person, or at least I should be.

So, what exactly are you doing to protect your family’s nest egg from catastrophic loss in the next financial crisis (whenever that happens) and to grow your portfolio in the interim? It’s best to prepare well in advance…kind of like building a solid structure to store the annual harvest from the coming winter. I love teaching workshops, so I’m thrilled to get back in front of classrooms of great savers, business owners and professionals over age 50 in Calgary, Red Deer and Edmonton. We’re calling these workshops “Straight Talk for Retirement Success.” Through this newsletter, we’re giving all our subscribers an opportunity for early registration for these free 2-hour workshops BEFORE my next interview with Mike Campbell on Saturday Sept 29th starting between 9:52 and 9:55 am on Money Talks. Click here for more information and to register.

Oh yes, and we’re still waiting for the release of Socrates from Armstrong Economics. We’re ready at our end, and I’ll share more details during our upcoming workshops.

These are the voices of reasons that keep me sane: my wife, Martin Armstrong, Michael Campbell, Jordan Peterson, Jonathan Haidt, Dave Rubin, Dennis Prager, Thomas Sowell, Larry Elder, Christina Hoff-Somers, Heather MacDonald, Douglas Murray, Bill Whittle, Rex Murphy, Lorne Gunter, Anthony Furey, Candice Malcolm, Mark Milke, Joe Warmington, Laurie Goldstein, Tucker Carlson, Newshub Nation, and Brian Lilley. My guilty pleasures: Andrew Klavan, Ben Shapiro, Steven Crowder, Paul Joseph Watson, and Mark Steyn.

Patience and Discipline are accretive to your wealth, health and happiness so focus on these.

Cheers,
Andrew Henry Ruhland, CFP, CIM
Founder, Integrated Wealth Management Inc.

Being an Opportunist within the Defined Benefit Pension Crisis

At the request of Money Talks, we’ve created a very thorough summary that tells you how to deal with the pending Defined Benefit Pension Crisis. Please click here to request your copy of this important article.

Object Lessons in Mass Psychology and Discipline

Humans are hard-wired for connection, and as such our very nature pre-disposes us to investment failure, because most people want to be part of the “In” crowd. That’s quite a mouthful, and an ominous one at that. Our current U.S. equity market environment provides object lessons in both mass psychology and discipline.

As I write on the morning of March 2nd it’s noteworthy that yesterday saw $8.2 billion go into SPY, the largest ETF on the S&P 500. That’s the biggest single daily inflow since December 2014 and the second largest in six years. Contrast that with recent reports from major institutional investment houses that state they’re either not increasing equity exposure, or they’re planning to actively decrease equity exposure in portfolios.

Since every trade has a buyer and a seller, there was also $8.2 billion worth of trades yesterday wherein “someone” is getting out. The only possible conclusion one can arrive at is that Institutional Investors are selling their positions to Retail Investors. Market tops are often referred to as those times when investments transfer from strong hands (Institutional, “Smart Money” investors) back to weak hands (Retail, Dumb Money” investors), and that’s what this smells like.

So, are you more comfortable investing with the masses – “hard-wired for connection with the crowd” – or are you content being a patient and disciplined contrarian whose investing behavior mimics or follows the smart, patient and behaviours of Institutional Investors? This is the object lesson in mass psychology: are you part of the “smart” money or the “dumb” money?

The stronger the mass opinion that “everything is positive and rosy,” the more likely we’re close to an interim top…one can almost smell the desperation of the recent buyers whose Fear of Missing Out (FOMO) has over-taken their Fear of Loss of Capital (FLOC), or perhaps their bias against Donald Trump. As Michael Campbell and others has recently warned, mixing your political opinions with your investment decisions is a recipe for disaster.

So, was yesterday’s retail buying panic driven by frustrated Democrats who had previously believed that the markets had to crumble because Donald Trump is (in their eyes) “the source of all evils soon to be perpetrated on America”…and whose February 28th address to a Joint Session of Congress was widely hailed (by 75% or more of viewers) as positive, strong, clear and, yes, even somewhat Presidential? Was yesterday the hard evidence of shy retail investors throwing in the towel, and proclaiming “Just get me into this market before it gets away?”

While I don’t believe this is a major market top that starts a major meltdown, history shows that buying frenzies like we saw on Wednesday March 1st usually immediately precede pull-backs. Only time will tell if history is once again our best guide…but that’s where our Clients’ (and my family’s) money is positioned. It’s boring, and relentlessly effective. If we get a dip in markets, remaining cash will get deployed, so we’d be completely okay with a sharp little pullback. It would be the pause that refreshes “The Bull”, whose lot in life is to always slowly climb the wall of worry created by the masses.

This begs a second important question for readers: do you have a clearly articulated Investment Policy Statement (IPS) that defines the framework for your portfolio? Is your minimum and maximum exposure to cash, fixed income, stocks, precious metals and alternatives clearly laid out as a guide for investment decisions? If you don’t have an IPS, why don’t you? If you do have an IPS, is it being followed by your investment professional or you – if you’re self-managing? This is the object lesson in Discipline…are you following a smart framework?

Patience and Discipline are accretive to your wealth, health and happiness – so focus on these.

Cheers,

Andrew Ruhland, CFP, CIM

Founder, www.integratedwealthmanagement.ca

Intelligently Investing Lump Sums – presented at the WOFC 2017 in Vancouver

Click here to to download the presentation.

February 2017 Newsletter

Welcome to the February 2017 edition of Views from the Crowsnest. It’s been quite some time since I donned my winter gear, climbed the mast to spend time drinking in the panoramic view from high above the water’s surface, and then had the quiet space required reflect and distill my observations. Thanks for your patience.

We each have our own unique sensitivity to current events, but the last six to eight months has felt eerily similar to the financial crisis of 2008-9 – energetically. Obviously, we’ve not had a market crash like 8 years ago, but the U.S. has definitely undergone, and continues to experience a very intense crisis driven by the sudden disruption of their political status quo. Love him or hate him, The Donald is the Molotov cocktail Americans were warned about. Things really are upside down when Michael Moore nails the story.

Nearly everywhere you look or listen, partisan invective continues to fly, with little relief in sight. The victors continue to dance in the end zone, and the vanquished are still weeping and screaming from their sideline; each side’s response is magnified and amplified by their respective supporters in media. The rhetoric from the left is perhaps more intense, as they grapple with the reality of having lost control of the political power structure – at least its Executive Branch. Can we provide them with participation ribbons? Now we’re facing four years of “Trump is literally Hitler” versus “All criticism of the President is Fake News based on Alternative Facts.”

Thank goodness we have the leadership of entertainment industry elites to show us the way toward peaceful, reasoned and solution-oriented dialogue. Where would we be without their hasty, awkward, angry and ignorant rhetoric? I think my sharp tongue just pierced my cheek…who else can I blame for my own actions? Shall I virtue-signal some more so I can win a medal in the “Oppression Olympics” and then give it away to someone I deem to be more deserving…or should I do something constructive and useful?

Since Mr. Trump is the President for the time being, my hope – as previously expressed – is that he follows through on some of his biggest campaign promises, and moderates the most controversial and extreme ones. Personally, I am very supportive of tax cuts (corporate and personal), term limits for Congressional Members, and School Choice driven by parents. All are controversial to someone in some way, but they’re all necessary to creating meaningful positive change. School Choice is bad for the teachers’ unions and the Democratic Party but offers genuine hope for inner city families yearning to break the cycle of violence and poverty.

No one is above criticism, especially those who volunteer for political office. My sincere hope is that the White House slows down and does a more mature, thorough and professional job as it moves forward. Tactically, why rush things and issue sloppy and incomplete Executive Orders? Haste makes waste.

Oh, how the status quo has started to shake at its core. Canada will have its turn, too, after France, The Netherlands, Germany, Italy, Poland and Hungary…with yet another “Greece fire” ready to trigger the alarms in the crowded theatre. The dark horse of populism gutted out an amazing “kick” in the final stretch of the Brexit vote, and has excellent financial support and tactical coaching for future races.

In my opinion, the success of populism depends on its various leaders’ ability to distance themselves from the genuinely dark elements on the fringes of their support base. This is the best political ad I have ever seen…it resonates elegantly and powerfully with the spirit of the age, in an obvious attempt to focus on the positive messages connected to LePen’s cause. Recent riots in France are serving to amplify this message…over-efforting creates countervailing forces.

Long-time readers are unsurprised by these events. Martin Armstrong’s Economic Confidence Model (ECM) has obviously been correct yet again: we’ve passed the peak of confidence in government. The non-stop hysteria around all things “Trumpian” is a formidable distraction for anyone focused on becoming or remaining financially independent. The negative energy of our public discourse is causing widespread battle fatigue and stress, and (almost) nobody makes optimal decisions under high stress.

Most of us have our “fight, flight or freeze” instincts triggered…very similar to investor responses during the 2008-9 financial crisis, except that more investors appear to be more influenced by their Fear of Missing Out (FOMO) than Fear of Loss of Capital. This observation inspired an article and a workshop. Last weekend, my colleague Randy Balkenstein and I participated in Michael Campbell’s World Outlook Financial Conference, with excellent attendance at our “Intelligently Investing Lump Sums” workshops. You can view a condensed video of this workshop by clicking here.

One of the “diamonds” uncovered in this media-driven war on free speech is – for me – the very calm, respectful and articulate Dave Rubin . This self-described “progressive liberal” recently discovered that his love of personal liberty forced him to re-think his political allegiances. My hope is that more people like him will emerge; we need people like him to lower the intensity and raise the intelligence of public discourse on political issues. The two videos linked in bold above are well worth the time investment.

One of the most challenging elements of writing and editing material for any audience – especially for a discerning audience with a rapidly shrinking attention span – is being disciplined and humble enough to say only what is absolutely necessary. This practical constraint is a yoke upon all who step into the public forum, and frustrating for those who crave nuance and subtlety – audience and presenter alike. This modern reality is clearly juxtaposed to what we do…which requires time.

Our professional expertise -and passion – is the collaborative creation, real-time implementation and ongoing management of our independent-minded Clients’ wealth management plans. In part, this requires us to listen and think both fast and slow, to reflect and distill the core principals driving our Clients’ decision-making (their Life Goals™) and to work in partnership with Clients in their quest to become and remain financially independent. It also requires us to constantly filter and discard endless streams of trivial information, so we’re left with actionable wisdom.

In an effort to bridge the chasm between communicating both fast and slow, we’ve made the decision to begin the process of mapping, creating and producing a series of videos shorts on both time-sensitive and timeless topics related to comprehensive holistic wealth management. We look forward to sharing more on this project as we progress.

And we’re edging ever closer to the launch of our Socrates-based investment platforms. We have tentatively scheduled a webinar for Saturday March 25th at 11:15 am (Mountain Time) to explain more on how our Portfolio Managers will utilize Martin Armstrong’s system. We will have limited space available for this event, and you can reserve your participation by simply replying to this email with your name and other contact information.

Patience, discipline and compassion are accretive to your wealth, health and happiness – so focus on these.

Cheers,
Andrew H. Ruhland, CFP, CIM
Founder, Integrated Wealth Management Inc.

Pointed Questions for a New Advisor

Selecting a new wealth management firm for your investment accounts can be stressful. Following are some very specific questions you should ask of any new advisor you are considering hiring. The advisor should be able to answer these questions without advance notice. You might want to copy and paste these questions into your own document for reference purposes.

Questions about the Advisor’s Services and Business Structure:

  • Besides access to investments, what services do you provide? (E.g. Financial Planning, Tax and Retirement Planning, Collaboration with Accountant and/or Estate Planning Lawyer, Life and Health Insurance Services, Parent Care & Health Planning, etc.)
  • How many client families do you currently serve?
  • What’s the maximum number of client families you will work with?
  • How many people do you have in your team? What’s your business’s succession plan?
  • If we become clients, how often would we meet in person, conference call, etc.?
  • What are your professional designations and experience?
  • Where do most of your new clients come from? Referrals from related bank branches, referrals from clients, content-based marketing?
  • How are you paid? Commissions, hourly fee, or fee-based?
    • If commissions, how much (%) and how long does that keep me in those investments?
    • If fee-based, what are your fees and how do they scale down as the size of our portfolio grows or we bring over new money?
  • What are your minimum investment amounts for a new client family?
  • What specific attributes of your advisory business differentiate you from competitors? How exactly do these differences benefit me? Please be specific.
  • Are you free to share your own original ideas or research, or those from independent research sources?

How would your friends and clients describe you re: being more of a mainstream thinker and advisor, versus being an independent thinker and innovator?

  • Are you familiar with Martin Armstrong? Please share your views on his work, etc.
  • What are your views on the safety and investment potential of long term govt. bonds?
  • How are my accounts protected from theft or fraud?

Questions about the Advisor’s Firm:

  • Does your firm have investment banking operations (aka corporate financing relationships) with any public securities issuers?
    • If yes, please explain exactly how we are protected from conflicts of interest created by these investment banking relationships. Are any of these securities issuers represented in any of your portfolios?
  • Does your firm have proprietary investment platforms like mutual funds or separately managed accounts?
    • If yes, what % of your clients’ investments are in these proprietary investment choices? If over 10-15%, why such a high %? Are there any incentives (financial, recognition, educational) for recommending proprietary investments? Do you own shares of the company?
    • If yes, how does this affect your objectivity in respect of your firm’s proprietary investment offerings?
  • What pressures do you have from branch or senior managers in respect of your average revenue per client?

Questions about the Investment Managers the Advisor Recommends for Clients:

  • Are your investment managers Fiduciaries? Would our accounts be considered to be under Fiduciary Care, or is our risk framed by industry “Suitability Requirements?”
  • Given the low interest rate environment, what specific strategies and investments do your managers use to increase yield in the non-equity portion of our portfolio, without taking on unnecessary capital risk?
  • Do your managers typically hold more than 40 stocks in their core equity portfolios?
  • How free are your managers to make significant adjustments to country, asset class and sector allocations in order to take protect and grow our capital…or are they restricted in terms of the changes they can make?
  • How do your managers deal with risk and reward in the currency markets?
  • Do your managers actively use option overlay strategies in your equity portfolios?
  • What are the risk management parameters in place on the securities your managers select, or is it more buy and hold?
  • Can you please provide a summary of your clients’ investment performance?
  • How much flexibility is there for your portfolio managers to make higher allocations to high growth sectors such as precious metals, energy, technology, etc.?
  • Do your Portfolio Managers use independent research sources, or only those from the firm’s research department?
  • Are your Portfolio Managers familiar with Martin Armstrong’s Socrates/ECM™ system? Are they both willing and able to incorporate Socrates™ into how they manage my portfolio?
  • How often do you (the advisor) communicate directly with the people who make the day to day investment decisions for our portfolio? Can I speak directly with the portfolio manager? If yes, how often?
  • Given that wealth creation and preservation is firstly about avoiding wealth destruction, how exactly will you protect our nest-egg from catastrophic losses whenever the next major financial crisis starts to unfold?
    • Are they willing and able to fully “de-risk” our portfolio when necessary?

We look forward to participating in the upcoming 2017 World Outlook Financial Conference, including presenting information-packed Personal Finance Workshops. We hope to see you there.

Cheers,

Andrew H. Ruhland, CFP, CIM

Founder of Integrated Wealth Management in Calgary

www.integratedwealthmanagement.ca

What I Learned at Martin Armstrong’s Orlando Conference

Last week I attended the Institutional and Technical Analysis sessions at Martin Armstrong’s World Economic Conference in balmy Orlando, along with the Chief Investment Officer of one of our discretionary Portfolio Managers from Toronto. This trip was the most recent step of my 22 year project of bringing Marty’s precision models into how our Clients’ money is managed.

martyface

The three most important takeaways were: we’re on the right track, most people using the Socrates system as a standalone are still challenged, and Socrates is a very precise tool best used by skilled hands. Here’s a bullet-point summary:

We’re on the right track:

1) Marty’s major forecasts around currency allocation, gold, stocks and government bonds have been exceptionally accurate, so our Client portfolios are well –positioned, and ready for what lies ahead

2) Trump’s election does NOT change the bigger picture long-term trend directions, but he may help to steepen/accelerate a few of them, like:

  • capital inflows to the $USD, stocks, etc. by virtue of proposed reductions in corporate taxation
  • rising bond yields based on promises of massive infrastructure spending that will need to be financed with additional debt…pushing the U.S. closer to the crest of the slippery slope

3) The fact that Trump’s election and some of his early Cabinet appointments have shaken things up in virtually every major Establishment institution (EU, UN, MSM, the Fed, et al) probably means he’s headed in the right direction. In particular, the MSM snowflakes are proving why their trust ratings are bunched up down around their collective ankles

4) I met conference attendees from about 10 different countries, and a clear theme emerged: very successful non-mainstream people have become successful mostly because they understand that being non-mainstream is not “extreme.” The masses are – by definition – wrong at the extremes, but they create the trend in between. Being an independent thinker means that you are willing and able to “ride the herd without becoming one of them,” and you don’t really care at all about being popular

  • Most people who are using Socrates as a standalone platform are having trouble:

1) Marty’s ECM and Socrates works very effectively when used properly, but it’s a new and different framework with its own language

2) Socrates does not prevent people from making foolish investment decisions based on their own biases and psychological weaknesses

3) The people who are using Socrates unsuccessfully have some common traits: insufficient diversification, undisciplined trade execution, hyper-active trading frequency, and very sloppy risk management

  • Socrates is a very precise tool best used by skilled hands.  As one of Marty’s team explained it, a wise parent wouldn’t give a sniper rifle to a child…because they can hurt themselves and others without the proper training and maturity. Specifically:

1) Socrates is NOT supposed to be used as a day-trading platform

2) Socrates should be used in tandem with an existing disciplined framework, including proper diversification, disciplined trade execution, moderate trading frequency, and with very disciplined risk management in place

3) Our managers will utilize Socrates to make sure Client portfolios:

  • Are on the right side of every major currency move
  • Are over-weighted in asset classes that have the best risk : reward potential
  • Avoid major losses from high-risk asset classes, and possibly benefit by shorting these asset classes
  • Click here to find out more about how this works https://integratedwealthmanagement.ca/special-video/

Our team is looking forward to hearing Marty again at Michael Campbell’s upcoming World Outlook Financial Conference, as well as sharing our insights with attendees during the Personal Finance Workshops.

Patience and discipline are accretive to your wealth, health and happiness – so focus on these.

Cheers,

Andrew H. Ruhland, CFP, CIM

Founder and President

Integrated Wealth Management Inc.

Dealing with Lump Sums

Are you sitting with a large cash position and wondering what to do? Are you feeling anxious over the market conditions based on the U.S. election, and not sure about making the next move? You’re not alone, and this article can help.

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Whether the cash came from the sale of a business or real estate, a pension roll-out or stock option exercise, an inheritance or simply seeking shelter from the next anticipated market downturn…having a large amount in cash is both comforting AND anxiety provoking.

The older you are and the bigger the lump sum, the more challenging this becomes. It’s easy to over-think the situation and end up feeling like the proverbial “deer in the headlights” especially if you’re concerned about market valuations and event risk.

A wise mentor once told me that “when your principles are sound, they can never fight you,” so in our firm we’ve designed principle-based processes to deal with almost every major situation that clients experience over a lifetime…we live the mantra “process provides protection.” Maybe that’s why intelligent and analytical people are drawn to us? What I know for certain is that this methodical process dramatically reduces stress and improves the longer-term outcomes. Here it is:

  • Assess how this lump sum needs to complement the other investments you currently have, including these questions:
    1. How confident are we in how the rest of our portfolio is being managed, especially regarding risk management?
    2. Does our current financial advisor have all the tools necessary to deal with future challenges and opportunities?
    3. If you’re self-managing, do you still want to have the primary responsibility for day to day investment decisions?
    4. If you have your portfolio divided between multiple advisors, have you considered the potential cost savings, portfolio coordination benefits and additional tax deductions that you could be missing out on?
  • Once you’ve carefully answered the questions above, and are comfortable with the asset mix and investment vehicles you’ll be buying into, we get to the most stressful part. Just like eating an elephant, we recommend doing it one bite at a time. Here’s how we implement:
    1. Decide on how many tranches you want to divide your lump sum into. It could be 3 or 4 equal portions, or another number you’re comfortable with.
    2. Decide on the frequency of getting the subsequent tranches of capital invested, perhaps monthly or every six weeks.
    3. Add tactically to each asset class as it experiences its own natural dip
    4. Be ready to pounce. Crisis contains danger for the unprepared, and opportunity for the well-prepared and patient types. If a major buying opportunity materializes during the systematic implementation process described so far, that’s the best thing that could possibly happen. You get to buy under-valued assets while others are selling them in a panic, thus taking advantage of “Mass Psychology” instead of being the victim of it.
  • Once fully implemented, monitor and adjust as necessary, using the risk management parameters and systems that you’re comfortable with. If someone else is managing the portfolio, get clarity on exactly how they manage downside risk.

This process works like a charm, but you need to follow it systematically.

Patience and discipline are accretive to your wealth, health and happiness, so focus on these.

Cheers,

Andrew H. Ruhland, CFP, CIM

Founder and President

Integrated Wealth Management Inc. in Calgary