Last June, I published an update piece to the publication titled “The Reality of Where We Are”. In those pieces was a very cautionary and bearish tone, one that identified a flattening (now inverted) yield curve (when short maturity interest rates are higher than longer maturity rates – almost always a tell-tale sign of recession) and a Federal Reserve that had a lot of catching up to do from way too loose of policy.
In March of this year, I published a cautionary piece for investors and consumers. It can be found on our website by visiting this link: https://lauderdaleadvisors.com/the-reality-of-where-we-are/. My concern was a Federal Reserve that was way behind, analysts and economists were way too bullish, and a consumer that was outspending its means, even in a strong economy. I had taken a very defensive posture for clients, our quants were some or all cash, short term Treasurys, or cash equivalents, and our hedge strategies had really begun to see their underlying protections grow in value. We’ve seen bonds continue to plummet as rates rise, a yield curve inversion (and another one today), and a Fed that has finally decided that it was wrong all along.
When I first began developing these pieces, the purpose behind developing a vision for them was to deliver a concise, no-nonsense article for clients and followers to receive my perspective without the typical fluff that we see time and again in other publications. I named this concept Keeping it “Reel” as I liked the fishing pun, but also the meaning behind it. Today I intend to communicate where my thoughts are at with the environment that we have found ourselves in.