[music] Chris: This is Chris Perras, Chief Investment Officer at Oak Harvest Financial Group with the January 18th edition of Keeping you Connected to your Money. Each week, we try to recap the week’s events, we try to educate you a little bit about our thought process, what’s going on in the markets, and try to give you a little bit of what we’re thinking about is going to happen in the weeks and months ahead. I want to title this week’s piece, Fear-Based Investment Management. What that is, is it’s basically those managers that are out there that will claim, “I’ll get you out, I’ll protect your money.” I’ve been managing money for 25 years. I’ve ran a $30 billion plus mutual fund. Ran the number one fund in the country twice. I run the number two mutual fund in the country over five and a half year period in the crash of 2008 or a hedge fund that was down 3% when the market was down 55%. Almost every single one of these systems I found is trend following and based on volatility, and I have never found one that works. I definitely never found one that works if the manager is going to charge you 1% management fee. These are systems that are lagging. They tend to actually sell stocks when they’re down and buy stocks when they’re up and they do not work for long-term investing. They’re marketing systems more than they are investment systems. If I could focus first on planning and setting your asset allocation, you would not have to worry about what the stock part of your portfolio was doing. That’s what we do here at Oak Harvest, we focus on planning first. We focus first on your goals and objectives, what’s your expected rate of return that you need in retirement or need during the accumulation phase. We look at that and then we set the asset allocation based on our core four asset strategies, those strategies being safety, our cash substitutes,…

Chris: This is Chris Perras, Chief Investment Officer at Oak Harvest Financial Group with the first edition in 2019 of Keeping You Connected To Your Money. Each week, we try to recap the prior week’s events and share with you our views on the market. Also, try to educate you a little bit along the way. This week, I wanted to entitle 2018 a year of emotional investing. Just as a little recap, 2018 saw the beginning of the year start out with an almost 7.5% gain in January, driving the market up to what we believed were high PEs and high evaluations. The market almost traded at 22 times earnings in January. The market came back down very quickly in February and March as volatility started to increase with the Federal Reserve deciding to accelerate their pace of interest rate tightening. The period up until late September showed the market rallying back to an all-time high. The market almost up 10% at the end of September reaching 2,941. However, that market advance was only led by about five to 10 stocks and almost all of those were technology stocks. The vast majority of stocks sectors in groups peaked way back in January, Names in the industrial space, names in the technology space, semiconductors peaked way back in January and had spent that eight months going down. Federal Reserve came out in October and said that they weren’t near done tightening a market didn’t like that too much. Over the next three months, the market saw volatility spike dramatically, market falling all the way from the peak in late September, early October to the lows of the year on Christmas Eve, which was the worst Christmas Eve, I think in the recorded history of the stock market. At that point in time, the market from peak to trough was down 20%, thus defining a bear market by all those educators and market historians. It ended the year down a little over 6% at 25, 25, at the very bottom of…

Chris Perras: This is Chris Perras, Chief Investment Officer at Oak Harvest Financial Group. Welcome to the Christmas Eve edition of Keeping You connected to Your Money. Each week we try to recap events in the market and share with you our views on what we believe will transpire in the weeks and months ahead. This week, I’m going to title this one, the Grinch that stole Christmas and my stock market gains for the last 18 months. After another volatile week last week in the market, that we saw most stock indexes move closer to bear market declines, US stocks extended their December losses on Friday, amid a dramatically higher short-term volatility. In fact, a volatility which was 10 back in January, hit 30 to 31 on Friday. Slow in global growth attributed to this decline, partial government shutdown looming, Trump wanting $5 billion for his border wall, and then the resignation of the Defense Secretary James Mattis, which was unforeseen by pretty much everyone, happened on Friday. Most importantly, with regards to the financial markets, federal reserve who continues to see a stronger economic growth than really the markets and the data series that we look at are providing. Year to date, as I said, market volatility has increased dramatically. It was less than 10 in January, which was historic lows. It hit 30 on Friday. We’re at the very end of the year, there’s generally no liquidity at this time of the year. People are out there right now, I think, tax-law selling. We saw upwards of $90 billion with a B dollars exit the market over the prior two weeks. That’s a historic high. Usually, a great indicator in market sentiment, money flooding out of the market at the lows, money coming into the market like January when $55 billion came in at the highs. The increased volatility, the reasons as we’ve talked about in the past, trade tensions between the US and China, those have been going on pretty much all year. They started right…

Chris Perras: This is Chris Perras at Oak Harvest Financial Group with this week’s release of Keeping you connected to your money. I’m going to title this one, 2018 emotional investing 101. As I sit here, I see the market down 1.7% intraday. A lot of red on my screen does not feel very good. What I will tell you is I think it was almost exactly a year ago when all I heard was how the economy was going through a global coordinated upturn, volatility was at a five-year low, investor sentiment was literally at an all time high, $50 billion came flooding into the US stock market in January of this year, the stock market went from roughly 2625 to 2875 in about six weeks. Everyone felt great, there was euphoria, people were asking me about Bitcoin. The data we saw was that actually, the economy was peaking then, but there was tons of optimism and everyone was feeling good, their 401ks were high and people were slapping each other on the back. Fast forward 10 months, and it’s December and investor sentiment is now at a five-year low, $45 billion left mutual funds last week, which was an all time high ever, cash allocation for individual investors according to a number of services has hit the highest level since February, 2016, investor optimism is the lowest since 2016 and market investor sentiment hasn’t been this low since April, 2013. That would be a wild ride. 10 months going from the highs of optimism to lows of pessimism. All that, and if I told you in December of 2017, the stock market would be flat for a year, most people I know would say, “I can deal with flat.” The stock market isn’t linear. It does not go up in a straight line. It certainly doesn’t come down in a straight line. What we’ve seen this year is not dissimilar to what we’ve seen a number of times this cycle. That’s the key thing I want you to…