Quote of the Week
“For every minute you are angry you lose sixty seconds of happiness.” Ralph Waldo Emerson
We have had more calls recently about the increase in trading in the accounts we manage for you. I will explain the reason, and want you to know that there are no added costs of this trading to you.
In all our accounts at Cambridge that we manage for you, we have what we call core positions. These positions, according to the data and mathematics, have a positive trend which usually lasts for a period of time, usually around three months or so. If the data causes these trends to change, we will adjust accordingly.
Every day we receive a “Risk Range” from Hedgeye, our data provider. For this example, I will use Gold. Gold currently has a positive trend, so we will always have a position in Gold until the data changes. We are currently allocating between a minimum of 10% and a maximum of 20% of your portfolios to Gold.
As of today (July 15), the “Risk Range” for Gold is $1,775 on the low end and $1,827 on the high end. The current price of Gold is $1,817, which is moving closer to the top of the range.
When Gold is near the low end of the price range, we will maximize our position at 20% because we want to buy it at a low price. If Gold moves to the high end of the risk range, we will sell half of the position to capture the profit. We are only selling half of the 20% maximum position because the overall trend is positive, and Gold could continue to go higher, and we don’t want to miss out on the positive trend.
For example, on March 8 we sold half of the 20% position when it was near the high end of the range, then Gold moved down near the bottom end of the “Risk Range” so we added back a 5% exposure on March 29 for a total of 15%.
We are currently using this technique on Gold and US Treasuries. We have waited and watched to be sure this works before instituting this strategy. This strategy won’t have a giant effect on the portfolios, but we may as well take advantage of the mathematics when we can.
What a year 2020 has been so far. One blessing I had was being able to travel to meet my precious grandson in February. When we returned mid-March, all Corona broke loose! I have noticed an increase in suspicious emails in my personal account but luckily, I spotted the oddities before doing any damage. The following info may be useful to you.
Watch Out for Coronavirus Scams
Fraudsters and scam artists are always looking for new ways to prey on consumers. Now they are using the same tactics to take advantage of consumers’ heightened financial and health concerns over the coronavirus pandemic. Federal, state, and local law enforcement have begun issuing warnings on the surge of coronavirus scams and how consumers can protect themselves. Here are some of the more prevalent coronavirus scams that consumers need to watch out for.
Schemes related to economic impact payments
The IRS recently issued a warning about various schemes related to economic impact payments that are being sent to taxpayers under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.1 The IRS warns taxpayers to be aware of scammers who:
- Use words such as “stimulus check” or “stimulus payment” instead of the official term, “economic impact payment”
- Ask you to “sign up” for your economic impact payment check
- Contact you by phone, email, text or social media for verification of personal and/or banking information to receive or speed up your economic impact payment
In most cases, the IRS will deposit the economic impact payment directly into an account that taxpayers previously provided on their tax returns. If taxpayers have previously filed their taxes but not provided direct-deposit information to the IRS, they will be able to provide their banking information online at irs.gov/coronavirus. If the IRS does not have a taxpayer’s direct-deposit information, a check will be mailed to the taxpayer’s address on file with the IRS. In addition, the IRS is reminding Social Security recipients who normally don’t file taxes that no additional action or information is needed on their part to receive the $1,200 economic payment — it will be sent to them automatically.
Fraudulent treatments, vaccinations, and home test kits
The Federal Trade Commission is tracking scam artists who are attempting to sell fraudulent products that claim to treat, prevent, or diagnose COVID-19. Currently, the U.S. Food and Drug Administration (FDA) has not approved any products designed specifically to treat or prevent COVID-19.
The FDA had warned consumers in March to be wary of companies selling unauthorized coronavirus home testing kits. On April 21, 2020, the FDA authorized the first coronavirus test kit for home use. According to the FDA, the test kits will be available to consumers in most states, with a doctor’s order, in the coming weeks. You can visit fda.gov for more information.
Scammers have begun using phishing scams related to the coronavirus pandemic in order to obtain personal and financial information. Phishing scams usually involve unsolicited phone calls, emails, text messages, or fake websites that pose as legitimate organizations and try to convince you to provide personal or financial information. Once scam artists obtain this information, they use it to commit identity or financial theft. Be wary of anyone claiming to be from an official organization, such as the Centers for Disease Control and Prevention or the World Health Organization, or nongovernment websites with domain names that include the words “coronavirus” or “COVID-19,” as they are likely to be malicious.
Many charitable organizations are dedicated to helping those affected by COVID-19. Scammers often pose as legitimate charitable organizations in order to solicit donations from unsuspecting donors. Be wary of charities with names that are similar to more familiar or nationally known organizations. Before donating to a charity, make sure that it is legitimate and never donate cash, gift cards, or funds by wire transfer. The IRS website has a tool to assist you in checking out the status of a charitable organization at irs.gov/charities-and-nonprofits.
Protecting yourself from scams
Fortunately, there are some things you can do to protect yourself from scams, including those related to the coronavirus pandemic:
- Don’t click on suspicious or unfamiliar links in emails, text messages, and instant messaging services.
- Don’t answer a phone call if you don’t recognize the phone number — instead, let it go to voicemail and check later to verify the caller.
- Never download email attachments unless you can verify that the sender is legitimate.
- Keep device and security software up-to-date, maintain strong passwords, and use multi-factor authentication.
- Never share personal or financial information via email, text message, or over the phone.
- If you see a scam related to the coronavirus, be sure to report it to the FTC at ftc.gov/complaint.
1Internal Revenue Service, IR-2020-64, April 2, 2020
Copyright 2020 Broadridge Investor Communication Solutions, Inc
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These are the opinions of Larry Lof and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.
The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The Index includes a representative sample of 500 leading companies in leading industries of the US economy. Indices mentioned are unmanaged and cannot be invested into directly.
Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.