Bill Cara

2Q2020 Portfolio re-calibration

There are reasons for the major shift in how investors are investing today.

Investors are having to deal with an overwhelming change in macro-economic drivers:

1. Monetary and fiscal stimulus as never before seen in the US or the world
2. Central bank rates that are forced to stay close to zero
3. A global economic crisis that is by far the worst in almost 100 years
4. A surge in coronavirus cases in the US that may lead to a second lockdown of the economy
5. A political shift in US politics from right to left where the incumbent president has sunk in 30 days from a solid lead to an impending defeat if the trend continues
6. A surge in investor interest and corporate adoption of guidelines for ESG (Environmental, Social & Governance) that will lead to enterprise sustainability, and potentially an improvement in lifestyles.

How then are investors managing?

1. A shift from investing in profitable high-growth and high-margin companies to low-margin, sustainable enterprise
2. A higher allocation in alternative assets like Gold and Silver and in the shares of precious metal miners
3. Increase in investments related to the digital economy (fintech, cloud computing, Artificial Intelligence, and work-from-home technologies, etc)
4. An increase in investments in Biotech companies offering coronavirus-related research and genome studies
5. Withdrawal of investments in the Oil & Gas segment of the energy sector and in commercial real estate and labor-intensive companies
6. An increase in environmental and socially conscious investment.