March 2023 (Part II) – Charles Schwab Risk and Your Potential Exposure
March 14, 2023
Dear Investors and Friends, Following up on yesterday’s letter that dealt with developing a better understanding of the risk of failure at a bank, we received several questions from clients regarding the relative safety of their assets custodied at a broker-dealer custody bank in gene …
March 2023 (Part I) – How to Protect Your Cash from the Risk of Bank Failure
March 13, 2023
Dear Investors and Friends, In his most recent letter, Warren Buffett said, “our CEO will always be the Chief Risk Officer- a task it is irresponsible to delegate.” The importance of thoughtful and comprehensive risk management was highlighted last week and this weekend by the failure …
February 2023 – 2023 Outlook
February 15, 2023
Dear Investors and Friends, The purpose of this letter is to discuss RCM’s outlook for the fixed income market and, more generally, inflation and the economy over the next twelve months.
January 2023 – 2022 Performance Review
January 24, 2023
Dear Investors and Friends, 2022 was an incredibly unusual year for the markets with both stocks and bonds down. Going all the way back to 1976, there was only one other year, 1994, that stocks and bonds were both negative and 2022 is the only year that both were down double digits. S …
December 2022 – The Importance of Time Horizon
December 15, 2022
Dear Investors and Friends, Why should an investor allocate capital to short duration high yield corporate bonds (SDHYCB)? Mike and I get asked this question fairly frequently and the purpose of this letter is to provide our perspective on an answer. Superficially, I believe the point …
November 2022 - FTX & RCM’s Credit Process
November 29, 2022
Dear Investors and Friends, Investors, business professionals and the media spend a lot of time talking about, analyzing and ultimately investing in ideas. Is this new company’s product a good idea? Will the CEO’s new strategy work? Is there a market for this new app or service? These …
October 2022 - Q3 2022 Performance Review
October 25, 2022
Dear Investors and Friends, A theme we have been exploring this year is the “Great Reset,” the across-the-board reduction in valuations brought on by rising inflation. In Q3, global inflation was even more of a problem. At the end of June, Fed Fund futures indicated that the Fed Fund’ …
September 2022 - CDs, Cash Management and the Benefits of U.S. Treasuries
September 27, 2022
Dear Investors and Friends, The Federal Reserve raised interest rates 75 basis points last Thursday, the third time in a row that they have done so. While the market expected the hike, what it did not expect was the hawkishness of the Fed’s dot plot signaling there would be more aggre …
August 2022 - New Opportunities for Cash
August 18, 2022
Dear Investors and Friends, With nominal interest rates near zero for the past several years, many investors have had relatively significant portions of their “liquidity bucket” just sitting on the sidelines. Bank accounts, money market funds and even CD-based strategies offered relat …
July 2022 - First Half 2022 Update
July 27, 2022
Dear Investors and Friends, In our last letter we introduced our readers to our description for and explanation of the current downturn, “The Great Reset.” The trend that we highlighted continued through the end of the quarter with nearly all financial assets down significantly. This …