CONSUELO MACK: This week on WEALTHTRACK, Financial Thought Leader Jason Trennert and his team at Strategas Reserch Partners mix investment formulas to profit by including TINA, the Thrifty Fifty and the New Sovereigns. What he is cooking up now is next on Consuelo Mack WEALTHTRACK.
Hello and welcome to this edition of WEALTHTRACK, I’m Consuelo Mack. Despite 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 a trillion dollars, whereas domestic equity funds have seen less than nine billion dollars 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, including this week’s, this is one of the most disbelieved bull markets in history, despite the fact that stocks have had a fabulous run and have creamed 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%. The total return of the benchmark Barclay’s Aggregate Bond index over the same period has been a mere 35% for the entire period, an average annual return of 4.65%. Hindsight of course is 20/20.
A recent front page headline in the Financial 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 $14 trillion off global markets in the last 4 months, a more than 19% plus decline and by far the largest in several years. Are the best years of the bull market behind us? Are equity markets becoming too volatile and risky to navigate safely?
This week’s guest is a Financial Thought Leader known for his analysis of market patterns, risks and opportunities. He is Jason Trennert, 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 investment themes.
I asked Trennert why despite the long bull market he thinks U.S. stocks are still a good place to invest.