scm educational breakfast seminar market update presentation 11-01-2014
TRANSCRIPT
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STONEHEARTH CAPITAL MANAGEMENT
RISK MANAGEMENTfor
LIFE’S TRANSITIONS
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SCM Market UpdateNovember 1, 2014
• Where We Have Been
• Where We Are
• What This Tells us About the Future
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NOISE! NOISE! NOISE!BUY BUY SELL
SELL
BEAR MARKET
CRASH
EBOLA
CHINA
CRASH
2008
BUY THE DIP
ST
RO
NG
ER
USD
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Recent Pull Back
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Historical Volatility
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Asset Class Trailing 1 Year Return*
* Return as of 10/24/2014• Source Morningstar
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THEN AND NOWCHARACTERISTIC MARCH 2000 OCTOBER 2007 SPETEMBER 2014
INDEX LEVEL 1,527 1,565 1,972
P/E RATIO FWD 25.6x 15.2x 15.2x
SHILLER P/E 43.22 27.32 25.49
DIVIDEND YIELD 1.1% 1.8% 1.9%
PRICE TO BOOK 5.06x 2.91x 2.73x
FED POLICY RATE 6.0% 4.0% 0.25%
10-YR TREASURY 6.2% 4.7% 2.5%
HOUSELHOLD DEBT SERVICE RATIO 12.09x 13.18x 9.91x
Source: Federal Reserve Bank of St. Louis/FRED
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Sherman Sheet
Source: Sherman Sheet
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SCM Risk Model
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Nobody Knows Nothing!!!!!S&P500 Actual Year End
20131,848
Company NameS&P 500 Target Year End
2013Missed it by this
much
WELLS FARGO 1,390 32.95%UBS 1,425 29.68%
MORGAN STANLEY 1,434 28.87%DEUTSCHE BANK 1,500 23.20%
BARCLAYS 1,525 21.18%CREDIT SUISSE 1,550 19.23%
HSBC 1,560 18.46%JEFFERIES 1,565 18.08%
GOLDMAN SACHS 1,575 17.33%BMO CAPITAL 1,575 17.33%JP MORGAN 1,580 16.96%
OPPENHEIMER 1,585 16.59%BOFA MERRILL LYNCH 1,600 15.50%
CITIGROUP 1,615 14.43%
AVERAGE 1,534 20.45%MEDIAN 1,563 18.27%
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Your Portfolio
13.00%
37.00%
15.00%
5.00%
10.00%
5.00%
15.00%
SCM MODERATE PORT-FOLIO
FIXED INCOME US EQUITYINTERNTATIONAL DEVELOPED EMERGING MARKETFRONTIER MARKET MANAGED FUTURESCOMMODITY TREND FOLLOWING
40.00%
45.00%
10.00%
5.00%
SCM MODERATE BENCHMARK
FIXED INCOME US EQUITYINTERNTATIONAL DEVELOPED EMERGING MARKET
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SCM MODERATE ACTIVE WEIGHT vrs BENCHMARK
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Why Managed Futures?
60/40 Portfolio 60%Sp500/40% Barclays Aggregate.
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THANK YOU
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The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Stonehearth Capital Management, LLC is a Registered Investment Advisor. Registration does not imply a certain level of skill or training.