(303) 796-8885 jclorigo@gmail.com

July 29th, 2020

Chadd Mason, CEO The Cabana Group

Trust the Process
My apologies to everyone for the late commentary this week. I spent the last five days on a golf and BBQ tour across the beautiful state of Arkansas in an RV with my son Jack. Truth be told, we only made it two nights in the RV before we had enough of the “roughing it” and moved to hotels and B&Bs. Before you think the worst of us, we did pull that 26ft RV behind my truck throughout ALL of Arkansas. So, we were somewhat legit. What a great time we had. My son is headed off to college in three weeks and I am so glad I got to have that time with him. Let us never forget what matters most – and that is our family and friends. I digress.

World equity markets, and the broad U.S. market in particular (SPY) continue to hold the breakout earlier in the month above 3200. Our ability to do so bodes well for another leg up to the February highs. We are currently 6% from that level and each day it seems more and more likely we will get there, as money continues to come in off the sidelines. The possibility that we could revisit all-time highs within five months, after all that has happened this year, is nothing short of miraculous. As I have suggested several times over the past few weeks, people will be studying the 2020 stock and bond markets one hundred years from now. The collective wisdom of worldwide investors is an amazing discounter of information, but no one could have imagined in the middle of March that so many relative unknowns could be priced in such a way that in a matter of weeks stocks could recover 100% of the February and March declines. Amazing.

So, what happens once the losses are fully erased? A retracement back to all-time highs may be a very good spot for investors to pause and begin to assess a prudent path forward. The Federal Reserve has again held rates near zero and vowed to use all tools available to support an economic recovery. The fact remains that the extent of that recovery is unknown and the damage to our economy on paper has been enormous. I never bet against Americans to find a way forward or to come out better and stronger, but getting there is going to be a fight. A move above previous highs would essentially suggest that the prospect for earnings growth going forward is better than the prospect for such growth in February – before COVID became a household word. That is also hard to imagine.

We will avoid predictions and take it one day at a time as the medical and economic reality continues to unfold. As my son frequently says, “trust the process”. At Cabana, we remain in our Bullish/Transitional Bullish Scene.

IMPORTANT DISCLAIMERS
This material is prepared by Cabana LLC, dba Cabana Asset Management and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.

This material may contain ‘forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy. All investment strategies have the potential for profit or loss. All strategies have different degrees of risk. There is no guarantee that any specific investment or strategy will be suitable or profitable for a particular client. The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal.

Cabana LLC, dba Cabana Asset Management (“Cabana”), is an SEC registered investment adviser with offices in Fayetteville, AR and Plano, TX. The firm only transacts business in states where it is properly registered or is exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. Additional information regarding Cabana, including its fees, can be found in Cabana’s Form ADV, Part 2. A copy of which is available upon request or online at www.adviserinfo.sec.gov/.

The Financial Advisor Magazine 2018 Top 50 Fastest-Growing Firms ranking is not indicative of Cabana’s future performance and may not be   representative of actual client experiences. Cabana did not pay a fee to participate in the ranking and survey and is not affiliated with Financial Advisor magazine. RIAs were ranked based on percentage growth in year-end 2017 AUM over year-end 2016 AUM with a minimum AUM of $250 million, assets per client, and growth in percentage assets per client. Visit www.fa-mag.com for more information regarding the ranking.

The Financial Advisor Magazine 2019 Top 50 Fastest-Growing Firms ranking is not indicative of Cabana’s future performance and may not be representative of actual client experiences. Cabana did not pay a fee to participate in the ranking and survey and is not affiliated with Financial Advisor Magazine. Working with a highly-rated advisor also does not ensure that a client or prospective client will experience a higher level of performance. These ratings should not be viewed as an endorsement of the advisor by any client and do not represent any specific client’s evaluation. RIAs were based on number of clients in 2018, percentage growth in total percentage assets under management from year end 2017 to 2018, and growth in percentage growth in assets per client during the same time period.  Visit www.fa-mag.com for more information regarding the ranking.

No client should assume that the future performance of any specific investment or strategy will be profitable or equal to past performance. All investment strategies have the potential for profit or loss. All strategies have different degrees of risk. There is no guarantee that any specific investment or strategy will be suitable or profitable for any investor. Asset allocation and diversification will not necessarily improve an investor’s returns and cannot eliminate the risk of investment losses. While loss tolerance and targeted “drawdown” are identified on the front end for each portfolio, Cabana’s algorithm does not take any one client’s situation into account. It is the responsibility of the advisor to determine what is suitable for the client. An advisor should not simply rely on the name of any portfolio to determine what is suitable. Cabana manages assets on multiple custodial platforms. Performance results for specific investors may vary based upon differences in associated costs and asset availability.

Cabana claims compliance with the Global Investment Performance Standards (GIPS®). GIPS® is a trademark of the CFA Institute. The CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. To receive a GIPS Report and/or a firm’s list of composite/pooled fund descriptions please email your request to info@thecabanagroup.com.