Part 4: The Advance is Permanent; Declines are Temporary.

Accredited Investment Fiduciary Analyst ™

Illinois State Registered Investment Adviser
Life & Long Term Care Solutions

Phone: 847-686-4800
Email: [email protected]

Thursday, March 26, 2020; 10:25 am CST

Dear Friends, Family and Clients,

Our main indicators were completely "washed out" from intense selling pressure over the last several weeks. We saw market declines that were historic in nature.

Now, a week later they're incredibly positive.

We have to remember the stock market discounts the future. The Good, The Bad and The Ugly is "priced in" using a global auction marketplace.

The Russell 2,000 which recently traded at $96 per share, also traded at that level in May 2013. Years of gains wiped out in a few short weeks. Two thousand of the best, most entrepreneurial companies in America lost approximately 44% of their market value peak-to-trough. Those companies also pay an annual dividend income 132% GREATER than "safe" US 10 Treasury notes. (1.90% vs. 0.816%)

I could list the top 25 or 50 companies but other than 2 or 3, you've likely never heard of them. Emotionally frightened "bad" investors are BEGGING us to take these companies off their hands at 2013 prices.

What Now?

Did the stock market just make a low for the next decade consisting of years 2020-2030? We're not sure, but it's not the first time it's happened. (1979-1980; 1989-1990; 2001-2002; 2008-2010)

Can the market go lower? Of course it can. Did Divine Providence just hand patient investors an opportunity for a dignified retirement, helping to offset the continual erosion of purchasing power (meaning higher prices) during a 30 year retirement? With every fiber of my being I say "yes".

The market as defined by the Russell 2000 surely peaked in August 2018, contracting until now.
We're witnessing a bottom being put in place in a term I call "troughing". The market has four obvious earmarks. Expansion, Peak, Contraction and Trough. We just entered the last phase. It could take a few months or several quarters.

The US Transportation Index as measured by symbol: IYT is trading at the same levels witnessed in August 2013 and again in January 2016. I don't mean to discount the global affects of the corona virus, but we don't really know how this is going to play out.

Conclusion

Successful investing is a mixture containing equal parts of faith and finance. The previous five newsletters contained opinions on the financial, historical and cyclic nature of the market. In this edition I'm filled with gratitude for a second chance to purchase low cost funds containing thousands of the best companies listed in America; and which will pay holders a dividend income benefit over our retirement that will far exceed the stimulus checks sent by the Government.

"How can we repay God for all the good that He has given us?"

Question:What is the first job of a politician?
Answer: To get elected.

Question: What is the second job of a politician?
Answer: To stay elected.

Expect to see more stimulus packages rolled out between now and November 2020.

#Truth

Truth #1:
History and Faith shows us the market advance is permanent; and the declines are temporary.

Truth #2:
The world does not end; it only appears to be ending from time to time.

Truth #3:

All successful investing is based on historical probabilities, not remote catastrophic possibilities.

The cycle always reasserts itself. Always.

If any of your friends or family members feel abandoned by their current financial advisor during this time of stress and uncertainty please have them call me at 847-686-4800.

Please share this newsletter with them.

Respectfully submitted,

Bill

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charts courtesy of Dorsey Wright & Associates.
(1) available upon request
(2) https://www.chicagotribune.com/data/ct-shooting-victims-map-charts-htmlstory.html

Bill Ulivieri -AIFA®
[email protected]
www.cenaclecapital.com
Phone: 847-686-4800

Cenacle Capital Management is a State of Illinois registered investment advisor. IARD 130804

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