BNN Interview June 22, 2018

Market Outlook

I continue to recommend that investors consider having some allocation in one of the cheapest sectors, the precious metals, as rising levels of inflation are making it highly likely that the price suppression mechanisms will soon fail. Like in the Seventies, rising levels of global stagflation are attracting to many new global buyers of physical.

Inflation is the problem, as Alan Greenspan warned a few month ago, because debt levels will re-create the economic conditions of the Seventies; stagflation. He believes that if the Seventies repeat, as inflation rises it will first begin to move profitability, as it is, but then continue rising at a much faster pace then growth, eroding any possible profitability resulting in Stagflation. To that warning I ad an inevitable truth, that unlike the Seventies today we measure inflation in ways that fully minimizes its calculation, and global debts are exponentially higher.

I believe that this process has already begun, and stagflation is already here and will continue building because of various factors that are negatively affecting the global economy. Factors such as; global de-dollarization, end of Central Bank quantitative policies, global populist shift, and greater financial systematic risk. Factors that are being accelerated by President Trump’s isolationist policies, and all the new Populist political parties such as in Italy of late.

Continue to enjoy the remaining thrust behind this market, but understand that eventually it will reverse, and therefore it would be wise to start to hedge for that reality. Standard money management prudence advises that in normal times investors hedge their portfolio with at least a 5% allocation in the precious metals sector. These are not normal times.

Canaccord’s Precious Metals analysts have done stellar work at isolating the best in class choices in this sector. Furthermore, my Especial Opportunities Portfolio has been running since January of 2015, structured as a standalone solution to give high net worth clients and family offices quick access this sector through a proven disciplined portfolio. A review of this sector will surprise investors, as currently the shares are trading at attractive discounts to our target prices, and with many of these showing great results since gold bottomed at $1050 in December 2015. Please note that the bottom coincided the same week that the US Fed began rising rates, coincidence or forewarning?

Below you will find my market outlook and top picks, the full interview can found here; LINK.



I manage three segregated portfolios designed to help our clients with their cash management needs, capital growth, and dividend income generation. Portfolios are tailored to meet each client’s risk return profile based on their individual investment needs and are not suitable for everyone. The Special Opportunities Portfolio is designed as a standalone solution for those looking to get participation in the precious metals market, a sector long forgotten by most Investment Advisors. The Equity Income Portfolio is designed for growth and income through a “top down” industry specific approach. The Cash Management Portfolio is designed for short-term money management needs. All portfolios require a minus investment account size of CAD$300,000.

My views can best be followed through my LinkedIn page; linkedin.com/in/carrasco1.