Goodbye 2017; Hello 2018!

How was your holiday? Mine was spectacular.

I am much too old to sit on Santa’s lap. And the meaning of the holiday season has dramatically changed for me over the years.

As a child, the holidays meant presents and time off from school. But now that I am older (and hopefully wiser), the holidays are no longer a time, a season, or even a celebration.

To me, the holidays are more of a state of mind.

Instead of opening presents, it is about opening our hearts to the important people in our lives.

And now that I’m an AARP-aged adult, I have come to believe that the reason we spend so much money on Christmas presents is that we use them as a substitute for the words of love and appreciation that are unfortunately spoken too infrequently to the important people in our lives.

And I want to let you know that you are one of those important people. Because without your support, I would not have the opportunity to pursue my great professional passion of searching the globe for unique investment opportunities.

Where are the markets headed? Have you ever wondered what the pure, unbiased, DATA is showing? I know I’m constantly thinking about that, and it’s why I get so much use out of the Weiss Ratings website. My colleagues over there have a completely independent, unbiased, and proven analytical model that covers more than 14,000+ stocks, ETFs, and mutual funds trading in the U.S. or Canada. Best of all, they publish a free daily email newsletter that tells investors what they’re data is showing about trends in all of those investments. You can sign up to receive that critical intelligence here.

That passion was inherited from my father. He was a vegetable farmer who worked his fields with an unwavering dedication to deliver the best product he could to his customers. In fact, my father’s produce was so perfect that generations of families would drive to our remote farm in western Washington to purchase his delicious vegetables.

I don’t have any dirt under my fingernails like my father did. But I share the same passionate commitment to my customers. And that is why I so truly value your interest in my work.

Thank you, thank you from the bottom of my heart.

Lastly, this holiday season is an extra special one for me as I welcomed my first grandchild, Anderson Sagami-Sullivan. I have to admit; my adorable granddaughter has sent me into grandpa heaven.

Other than the poopie diapers, I can honestly say that being a grandparent is the most enjoyable experience I have ever had in my life … second only to coaching my children’s basketball teams.

Speaking of poopie diapers, I want to warn you about some investments that I think are going to stink in 2018. Like what?

• Bitcoin, Litecoin, Pizzacoin and all the other dizzying cryptocurrencies. Yes, there really is a cryptocurrency called Pizzacoin. There are more than 1,100 known cryptocurrencies at this time. And given all the buzz around them (and with a few hundred billion dollars flying around this market as we speak), we can expect even more in the near future.
• Bonds and bond funds. The three-decade-long bull market in bonds is about to die. After four interest-rate hikes and the promise of more to come, bond investing looks quite dangerous to me.

• Return of volatility. The stock market was shockingly calm in 2017, with nary a significant correction. In fact, the S&P 500 has gone up a record 13 straight months (14 months if the December gains hold). That won’t last. And the forthcoming roller coaster ride is going to make a lot of investors sick to their stomachs.

I could go on about things that worry me: the new Federal Reserve chairman … the rise in auto loan and credit card defaults … extreme investor bullishness … an overall dividend payout ratio in excess of 100% of profits … the rapidly flattening yield curve … $20 trillion of global QE … and historically high, nosebleed valuations. Just to name a few.

In short, I believe a lot of things — stocks, bonds and real estate — will be much cheaper in 2018 than they are today. However, you won’t be able to take advantage of longer-term price drops unless you have the cash to buy them.

Don’t think of cash as a boring, unproductive place to hide your money. Cash is an option to buy something cheaper in the future. And unfortunately, that is what most of the investors I talk to have none of.

Don’t be one of them.

Wishing you a healthy and prosperous 2018,

Tony Sagami