This monthly communication, “Financial Bullet Points,” will quickly and easily cover the main financial issues we see affecting the markets without being bogged down with a lot of details.
Written by Bob Barber, Prepared on Oct 27th, 2023
The Bullet Points for November are:
- Markets have been consumed with the 10-year bond yield moving from 3.8% to 5% for the first time in many years and are realizing that current interest rates may be here to stay. Lately, every time the 10-year bond has touched 5%, it bounces a little below that mark, so this could be the peak.
- The inverted yield curve (i.e., short-term interest rates are higher than long-term rates) we’ve had for the last 18-24 months usually indicates a coming recession, but that may soon change to a normal yield curve indicated by the rise in recent long-term rates.
- Emphasis on fixed income. Our ultra-conservative managed portfolio is now yielding over 6% net of fees. We use the same fixed-income portfolio for 78% of our conservative, 38% of our moderate, and 21% of our growth-managed portfolio. With a simple phone call from you, we can easily move from one portfolio to another. With interest rates so good now, we understand if you want to move a portion or all of your portfolios to ultra-conservative.
- In October, we restructured 50% of our equity exposure to an equal weighting of 49 of the most fundamentally sound, deep-valued, Biblically responsible stocks we could find in the marketplace. The average net dividend of these 49 stocks to you is 4.06%, so if we can get just 2-5% annual appreciation on top of the dividend, that’s a good total annual return. We will decide quarterly which of the 49 stocks to keep or replace depending on their value and fundamentals scores.
- The markets have been pricing in a coming recession for the last three months, yet on October 24th, GPD came in very hot at a 4.9% annual growth rate, or more than double the previous quarter. The markets continue to be surprised at the resilience of the U.S. economy and keep pricing in a recession by its behavior at this time. We are focusing on the interest and dividends spinning off our holdings over price appreciation until the markets come to their senses.
- Get educated. This month’s programs for Christian Financial Perspectives are:
- 10 Ways to Overcome Inflation (Nov 7th)
- Ten Year-End Tax Strategies (Nov 14th)
- 7 Takeaways for Christmas Spending (Nov 21st)
- Year-End Charitable Gifting Ideas (Nov 28th)
Can’t watch it on YouTube? You can listen on any smartphone while driving, cooking, gardening, or taking daily walks through almost any podcast platform, any time of the day, by searching for Christian Financial Perspectives.
Visit our channel: www.cfa.lc/yt
Until next time, we hope you have a wonderful November! That’s all for now.
Bob Barber, Founder & Owner
Christian Financial Advisors®
The views expressed represent the opinion of Christian Financial Advisors®. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Christian Financial Advisors® believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not indicative of future results.