Portfolio Update Report
Mirador Quick Market Update
August 06, 2024
Dear Friends and Clients,
Since we sent the Mirador Q2 2024 portfolio update last Thursday, there has been significant turmoil in the world’s currency, bond, commodity, and stock markets. So, in case you are seeing some fearful headlines, I am sending you this note of assurance and comfort.
At Mirador we have only one view or goal for Portfolio Management – Income with Security of Capital. The recent turmoil has caused us to shift our focus more towards security of capital, and that’s what this update is about.
As mentioned in last week’s update, we had already started reducing equity income stocks and increasing fixed income using preferred shares. With our lower stock exposure, we should experience less declines than the stock market indexes.
We have sold all the covered call write (CCW) allocation. Although this resulted in some realized losses, we bought back the calls at lower prices than we sold them for, and this helped to reduce the total realized loss. After selling the CCW allocation, our stock exposure is even less which should again help us decline less than the stock indexes.
Last Friday we initiated a Market Exposure position that is profitable as of this writing. The position represents the inverse of the U.S. S&P 500 stock index and is double-weighted. It will gain in price if the U.S. market continues to decline. Any gains from this should offset the declines in the income securities we continue to hold in order to continue to pay the distribution. Again, this should help Triopay decline less than the stock indexes.
So, we have done what is reasonable to secure your capital at this point. If the declines in the markets continue, we will add to the inverse market exposure. The cash for this will likely come from the higher risk positions of the Equity Income allocation – most likely the high yield positions. If the declines do not continue, we will close the inverse market exposure and stay in cash until the indexes show a change to a positive trend. And of course, before a positive trend develops, there could be some choppiness that leads us to move back and forth from cash to the Market Exposure inverse position.
As always, phone or email us to just say hello, or if you have any questions, comments, or ideas.
Sincerely,
Stan 403-608-4664
Joyce 403-978-6798