Columbus to Trump

I can’t believe we have past the halfway point for 2018 and in fact are past half way in July too! I often wonder where all the time has gone. I mean when I was a kid there was time to surf before school, time for school, playing with friends after school, homework and still enough time for dinner and to watch a movie. Now I blink, and the day is over…………. Maybe I am just getting old 🙁

Anyway, the speed at which we live our lives today got me to thinking how hard it is to make an informed decision when you don’t have all the facts. Here, where I am staying they are tearing up and repairing the tramlines outside. To me its crazy as that is one of the most efficient and quickest ways to traverse the city. I wondered what monkey in their infinite wisdom would start tearing up the city’s main transport line in the middle of summer and during peak tourist season.

But then a local explained to me that they always do it this time of year as all the schools are on summer holidays and many families leave town for the summer. So, it’s far more efficient to do this now and have it ready for the new school year than to do this in the dead of winter or during school time.

This train of thought (pun intended) made me consider unintended consequences as I was recently in Seville, Spain and visited the Seville Cathedral where they have an impressive monument/ sarcophagus rumored to house the bones of Christopher Columbus. I say rumored because he is also claimed to be buried in the Dominican Republic…but that’s a story for another day.

As I looked at his tomb it made me smile as I pictured a Donald trump float I saw in a Carnival parade…..And wondered if Columbus had any idea about the unintended consequences he set in motion with the discovery of the Americas 🙂

Now I have no intention of getting involved in a debate about politics, but I am certain you can agree Columbus never saw this happening when he accidentally bumped into the Americas in 1492 which was also an unintended consequence in and of itself as his intention was to sail westward until he hit Asia.

So what has this got to do with investing? ……nothing and yet everything 🙂

I wonder what the Federal Reserve and the US government was thinking when they saved the financial system from certain meltdown and decided to reflate everything! Did they consider the unintended consequences from interfering with the natural boom and bust cycle?….…yes I know we had a bust…but if not for their interference it would have been much worse. Instead all they did is kick the can down the road.

Yet now here we stand mere weeks away from this bull market becoming the longest in US history and quite frankly I don’t see anything to derail it…..for now. So, I think we are all but assured of this becoming the longest bull market. I honestly don’t think this was their intention back in the dark days of the global financial crisis but nevertheless this is where we are at.

Quick history lesson…the previous longest bull market lasted until around 2000 and then when it burst it took over twelve and a half years to get you back to square 1 and that was nowhere the magnitude of this one. So, when we do get the bust, maybe……and I am just guessing here……but maybe, we will have 15 years or more of going absolutely nowhere.

On the 9th of March 2009 the DOW bottomed out at 6,570.04 and on June 29. 2018 the DOW was 24,271.41 which is a staggering return of 269.42%. Don’t get me wrong that is certainly impressive.  The media have run countless stories how well you would have done if you got in at the bottom.

Now for a little perspective for those that were invested in 2007 when in October the DOW hit its all-time high (before the great recession that is) of 14,198.10. So, if you count the rise from there and not from the bottom then the overall return is 70.94…OK I will round up to 70.95%.

Still nice but it really does depend on where you started counting from.  And not wanting to detract from the amazing performance of the index but, I don’t think we can discount the investors that were invested then, rode it all the way down and were brave enough to stick with it. But that is and always will be the rub when it comes to traditional investing as it can be a roller-coaster of a ride.

This is why I like alternative investment strategies that are not at the mercy of the market or its direction. Now with FTM we don’t have a bottom to pick 🙂 …… instead all we can do is look at the inception date for each share class and the June 30 year to date performance.

FTM Class A
Total Return from March 2010       103.21%
June 30 Return      4.45%

FTM Class B
Total Return from October 2012      62.94%
June 30 Return       3.40%

FTM Class C    
Total Return from October 2014      45.81%
June 30 Return         5.15%

FTM Class D+
Total Return from January 2016      25.00%
June 30 Return        5.0%

So, if you are sick of gambling or playing the market guessing game, perhaps it’s time you took a closer look at FTM and what it has to offer.

Article by Endre Dobozy


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