07-27-2020: Anywhere to Hide?

Year-to-Date Strategy Stats as of COB today:

+23.61% : Turner Quant Advantage

+ 5.46% : Tactical Growth

- 6.61% : Total Market

- 0.92% : Diversified Income

- 0.78% : Aggressive Growth

I was chatting with a client today and he brought up a question that I thought might be of some interest to you. His question was, "Where do you think is the best safe haven (country) to store money, just in case the US economy and the US dollar were to completely collapse?"

Here was my response... (keeping in mind that the operative word in his question was, "think")...

  • If the US dollar was to collapse (something that 'some' pundits have made a career out of by forecasting the greenback's immanent demise for decades), the entire global financial system would likely collapse. So-called no-debt sovereign funds would have a hard time of it without the backing, one way or the other, from the US economic engine and currency. But, I am NOT well versed in the machinations of the various sovereign funds, so that is pure conjecture on my part.

  • I asked my client if he was asking the question because he fears a major market collapse in the near future, and he answered, "Yes". I told him that I will not be surprised either if a major market collapse does occur, probably at some point after the election. He then asked me what I think would happen to the market if Trump loses the election and if he does, do I think that would cause the market to collapse? As a dear reader of mine, you know that I am reticent to discuss political issues where I might offend (it is sooo easy these days to offend someone since everyone is so easily offended) my clients who are on one side of the aisle or the other. Of course I have an opinion about that question and I was forthright in my response to him, but unfortunately, I cannot be so forthright in this forum. But, I think it is pretty easy to see what would happen to the market if Trump loses in November. If you don't have a clue about what is likely to happen, please Google the following phrase, "what happens to the market if Biden is elected". My plan (so far) is to take all of my clients to cash a week or so before the election and then get back in one way or the other, after the election.

  • So, I queried my client with this question: "Which is better... to park your money in some foreign country and make nothing on the cash, or to be capitalizing on a bear market via inverse ETFs if the market doesn't like the election results?" A corollary to that question is, "What if the market loves the outcome of the election and booms higher? Wouldn't your money be better off staying engaged in the US stock market if it is in a strategy that is designed to grow capital in BOTH bull AND bear markets?"

  • Lastly, I added that gold and silver tend to be 'safe havens' when investors become overly worried about what's going to happen to the economy or the market or the Dollar. With commodities and associated companies seeing record gains in gold and more lately, silver; it behooves us to have some exposure to those commodities... and we do in our Diversified Income strategy and our Tactical Growth strategy.

My conclusion with my client was this... Assuming the dollar does not collapse, the safest haven with regard to being invested, is to be in a strategy that is designed to move up when the market moves down. Certainly that is our position and we are sticking to it.

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Turner Capital

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