Q2 Portfolio Report 2024

By Stan Clarke, August 1, 2024

Dear Friends and Clients,

On July 3rd, I was such a good boy writing the quarterly update letter within days of the quarter end. It was difficult to write – June was one of the worst months for the Canadian markets in a long while. The had being doing so well and then we gave a lot of it back in June. It’s never fun writing about bad news.

Like I often do, I finished the letter and put it aside and started working on the data for the graphical reports. Then many things happened:

Inflation numbers declined
Biden failed at the debate
Trump got shot
Rate drop probabilities for September increased dramatically
The yield curve became even more inverted

These resulted in significant shifts in the capital markets.

So far in July, The Mirador Income and Stability Fund has established three new high-water marks (all-time highs)! I opened the update letter I wrote a few weeks earlier and it was no longer relevant. So, after all these years of encouraging everyone to think longer-term, I had not done so myself. But in so many ways, you pay me to worry about everything short and long term, so that you don’t have to worry. Anyways, this is now an excellent portfolio update.

Here are some numbers AS OF LAST FRIDAY July 26th:

Mirador Income and Stability Fund
+9.93

Mirador Income and Stability Fund Benchmark (30%/30%/40%)
+6.17

CDN TSX 60 Stock Index (30%)
+7.90

U.S. S&P 500 Stock Index (30%)
+14.54

Canadian Bond Market (40%)
-1.40

So remember, if you’re looking at your Q2 statements and seeing a year-to-date number of around 5%, it is almost double that now, less than a month later. It was a busy quarter managing all the Mirador Income and Stability Fund systems:

Implementation of the U.S. the Mirador Income and Stability Fund was completed
The final transition from covered call writing (CCW) ETFs to Mirador’s proprietary CCW model was completed. As long as Mirador’s proprietary market exposure neural networks remain positive, we will stay with 10 – 15% covered writing. If the neural networks go negative, we will transition the CCW allocation to inverse ETFs
We once again added to fixed income via our preferred share holdings. With the allocation now at 30%, it is the highest fixed income allocation we have had in years. If the credit spreads continue to narrow or hold their current levels, if preferred share yields remain relative attractive (>6%), and if the yield curve inversion starts to dissipate, we will increase fixed income again and maybe even reach 40%. Watch for our next blog post in August for more details on the importance of the yield curve and credit spreads, versus the media’s obsession with the overnight central bank lending rates
We have been gradually reducing stock exposure because many of our position’s price appreciation has left them with less attractive yields. Our Equity Income allocation, which includes high yield and dividend growth stocks, is now down to 60%. As a result of active optimization of the Equity Income composition, the average yield of this the Mirador Income and Stability Fund component is still 7.14%
Despite the appreciation in the Mirador Income and Stability Fund unit value, the overall current yield is still 7.1%. This is somewhat due to the success of the newly started CCW component, but it is also a result of active allocation management and active security position optimization (we have executed 238 transaction year-to-date). This is a tremendous yield for today’s market and remember that it is very tax efficient. Even at these prices, the Mirador Income and Stability Fund is a convincing choice to allocate new funds to.

In the client services department, Joyce and I have published a number of blog posts recently. You get an email newsletter every time there is a blog post. And, the post is added to the Mirador website in the Knowledge Base section under the heading “Real Advice Blog”.

The following is a list of the topics so far. If any of these topics are something you are interested in, please go and have a read:

Recent quarterly reports are also shown in the Knowledge Base section under their own sub-heading. If you have any topics you would like us to do posts on, please contact us and let us know.

On the toy ranch south west of Longview it has been busy with the transition from winter to summer (we kind of skipped spring this year). All the animals are healthy and thriving. The June moisture helped the pasture recover well from last year’s drought, but there has been almost no rain all of July and things are starting to dry up quite badly again. Only one addition recently – Rusty the rooster is now my back-up alarm starting around 5:30 every day. Unfortunately, Rusty has a snooze feature that runs all day. Soon we will round-up the cattle for vaccinations, deworming and a few other treatments. Then it’s time to find hay for the winter and start the cycle all over again.

Joyce joined a fitness facility and does classes a few times a week. It’s a combination of free weights and cardio and she is very enthused and feeling energetic and looking great. Jessica started her post high school gap year working more hours at the Braeside Second Cup and spending more time evaluating her next education step. Emily is busy playing rugby and hanging out at the toy ranch – helping with chores, riding the horses, and keeping my hammock well used as a favored book reading spot.

That’s it for Q2 2024. As always, phone or reply to this email to just say howdy, or if you have any questions comments or ideas.

Later this summer or in the autumn we will send out a graphical report on the Mirador Income and Stability Fund's systems providing you with more details of the allocations, positions and results.

Sincerely,

Stan 403-608-4664
Joyce 403-978-6798