Tel: +1. 772. 492. 1550 [email protected]

Wealth Management – checking the strategy.

The economic situation is confused. Most of the traditional relationships have been overturned both at home here in the US, with developed nations and allie,s  and internationally between nations and continents. There is a palpable sense of unease and threat. The US economy is the strongest but the rest are suffering. Our turn may be just around the corner.

Any commentator can point to the gathering flock of black swans. The US administration has lost the trust of the world and with it the easy and priceless right of play a helping role. 

But despite all of this each of us relies more or less on the returns we can garner from our portfolios. So faced with the future – how do we make our money work for us?

Here’s my approach – a strategy dependant on a series of mental sieves that take me far from the stock market stardust of IPO’s, high tech, wizards forecasting untold wealth to an understood, objectively solid world of steady growth and a cautious preparedness to adapt and shift as the market evolves.

Step 1. See everything – do little.

There is an abundance of market chatter – I watch CNBC, read the NYT every day, watch the WSJ and IBD. They supply a background, a sense of direction, a context and taste for what may be down the road. But I do not make investments based on such a circus.

Step 2. Form a world vision. 

If you read the NYT or follow my Thought for Monday Blog, you will already have a world view. Economically we may well be closing on a perfect storm exacerbated by the foreign and trade policy missteps of the US. This has increased the vulnerability of our neighbours in America. It has added to the uncertainties in a Europe already threatened by Brexit, Nationalism, polarisation and the ongoing threat of Russia and immigrants from North Africa. It has threatened China’s hitherto vital role in shoring up trade throughout the world. It has set back technological and global action just when climate change, poverty, health care and education most needed modern and scientifically sensitive treatment.

But, however depressing, this scenario has clear cut implications for any individual wealth management strategy. Chinese stocks will underprform so long as the US seeks to hamstring them as will American companies with strong Chinese trade ties. There may be one or two excepptions – Poland for example – but no European nation is a reliable centre for economic growth in the immediate future. Most face debt challenges and are internally split by increasingly adversarial and extreme internal political disagreements. South America is confrontinfg a full hand of environmental and economic disasters – as is Africa.

The only safe focus of investment is the United States. Less reliant on overseas trade and led by a still buoyant home consumer market, US centric companies are performing well – especially those that play directly into the home market – restaurant chains, pet companies, local media groups, local communications, building supply and property companies.

Step 3. Hedging the downside.  

But the volatility remains, the black swans are flocking, and we are in the record 10th year of GDP growth. The likelihood is that there will be a recession within the next 18 months – certainly the market and the chattering classes can talk of little else.

So build a hedge of gold and keep a significant amount of cash to help you through the recession and allow you to buy into the market at a future time of much lower prices.

Step 4. The Selction Criteria.

Here are my criteria for choosing my portfolio:

– US centric businesses – no contamination from my world view.

– Strong record over the last 3 years, and strong forecast growth.

– Strong ROE, positive cash flow, and little debt.

– Clear special market strengths – a robust “moat”.

– A reasonable P/E below 40, and a robust dividend.

– No significant black mark from my regular research sources – Seeking Alpha, Zacks, Fidelity and Investors Business Daily.

Step 5. The Portfolio as at 10/11/2019.

So here are the current “winners”:


22 companies – I find it hard to keep tabs on more – and there are always the dozen or so others on my watch list – all great companies, each with at least one flaw – a high P/E, some china exposure.

The portfolio is spread equally across all shares and 50% is currently in cash.

I am severe with losses , pruning at -5% and closing out at -8%. I am no less severe with profits, taking them at +10%. So far I am up over 30% this year – I would settle now for a further 10% by the end of the year.


I hope this note is helpful in what has been a topsy turvey world. All the best, James