TRENNERT: UNAPPRECIATED BULL MARKET

October 9, 2015

Despite the fact that we have had an almost uninterrupted bull market for the last 6 years, investors have remained largely unconvinced, favoring bonds over stocks by an overwhelming margin. Are the best years of the bull market now behind us? Are equity markets becoming too volatile and risky to navigate safely?  This week’s guest doesn’t think so. Financial Thought Leader, Jason Trennert, Chief Investment Strategist of Strategas Research Partners explains why US stocks are still a good deal for investors.

WEALTHTRACK Episode #1216; Originally Broadcast on October 09, 2015

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JASON TRENNERT

Consuelo MackDespite the fact that we have had an almost uninterrupted bull market for the last six years investors have remained largely unconvinced, favoring bonds over stocks by an overwhelming margin.  Since the March 2009 market bottom, bond mutual funds and ETFs have experienced net inflows of more than one trillion dollars, whereas domestic equity funds have seen less than nine billion in flows.

The one exception to the anti-stock bias is international stock funds which gained nearly $600 billion in net flows.

As several WEALTHTRACK guests have put it, this is one of the most disbelieved bull markets in history, despite the fact that stocks have had a fabulous run and have vastly outperformed bonds.

Since the 2009 bottom the S&P 500 has appreciated 184%, a 17% annualized return. When you add in dividends, the total return is a 226% advance with annualized returns of nearly 20%. Compare that to bond returns. The total return of the benchmark Barclay’s Aggregate Bond index over the same period has been 35%, an average annual return of 4.65%!

Hindsight of course, is 20/20.  A recent front page headline in theFinancial Times sums up the current thinking towards stocks. “Equities Face Worst Quarter Since 2011 Over Fears for Global Economy”, including “China slowdown concern”, Fed policy and the “U.S. earnings outlook.”

Those fears have knocked a stunning $14 trillion off global markets in the last 4 months, a more than 19% decline. The losses have lead many investors to ask if the best years of the bull market are behind us and if equity markets are becoming too volatile and risky to navigate safely?

This week’s guest has the credentials to answer those questions and more. Jason Trennert is a Financial Thought Leader who is known for his analysis of market patterns, risks and opportunities. Trennert is co-founder, Managing Partner and Chief Investment Strategist at Strategas Research Partners, an independent investment strategy and macroeconomic research firm catering to institutional clients. Identified by Barron’s as one of “Wall Street’s best minds” Trennert and his team are known for their in-depth economic, political and market analysis and identification of major investment themes, some of which he will discuss with us.

As always, if you miss the show on Public Television, you can watch it on our website.  You’ll also find an EXTRA interview with Trennert about his motivation to write the recently published “My Side of the Street: Why Wolves, Flash Boys, Quants, and Masters of the Universe Don’t Represent the Real Wall Street”. You can also hear Trennert’s “One Investment” idea for a long-term diversified portfolio on this week’s program plus my Action Point , which provides some advice about investing in a period of increased volatility.

Thank you for watching. Have a great Columbus Day weekend and make the week ahead a profitable and a productive one.

Best Regards,

Consuelo Mathews Asia

FOCUS ON COMPANIES WITH FINANCIAL STRENGTH

  • Entering a period of increased volatility
  • Many companies have taken on large amounts of debt to take advantage of low interest rates
  • IMF warning of rising corporate failures

3 U.S. COMPANIES SEEN AS BETTER CREDITS THAN U.S. TREASURYS

(as of 10/1/15 – Lower 5-year CDS spreads than U.S. Treasurys)

  • Merck
  • Chubb
  • Cambridge Bancorp

THRICE BLESSED

Home Depot Inc (HD) Price: $118.82 on 10/7 52-week range: $86.35 – $123.80 HD Chart

HD data by YCharts

HD Chart

HD data by YCharts

This transcript will be available soon. More information regarding WEALTHTRACK transcripts can be found here

Jason Trennert from the WEALTHTRACK archives:

DEFENSE OF WALL STREET

Strategas Research Partners’ co-founder and Chief Investment Strategist Jason Trennert has spent his entire career on Wall Street. In addition to his widely followed research and strategy work he is also known for his insightful, thoughtful and sometimes irreverent observations about the Street and its characters. What was the motivation for writing his latest book, My Side of the Street? It was both personal and professional.


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