Joe Turner: Thank you, Pamela. I have been assigned by the team for today’s presentation to talk about the origin story of Pring Turner: how we got started, what our process is, and how we make portfolio decisions. I’ve got 10 to 12 minutes to cover what’s essentially 55 years of experience in the financial markets—because next month marks my 55th year in this business.
Let’s start by defining our process. A process is the series of steps or actions you take to achieve a desirable outcome. My journey started back in college in an investment class. The professor gave us $10,000 to manage in a simulated portfolio. I came in second, and my strategy? I picked stocks from the “most active” list on the back of the Wall Street Journal. Names like Memorex, Xerox, Electronics Associates. That success sparked the (false) belief that I might be a natural-born financial genius.
Fast forward to 1968—I entered the industry just as the market peaked. The Dow hit 1000 that year and wouldn’t see that level again until 1982. I quickly realized I wasn’t a genius after all—I needed to go to work. I was fortunate to have mentors along the way. A friend’s father, Barney, gave me investing books and later, boxes of journals and papers dating back to 1937. That became the foundation of my education.
Today, our decision-making process looks like an inverted pyramid. At the top is the secular outlook—long-term trends over 10-20 years. For instance, interest rates peaked in 1981 and declined until 2020. We believe we’ve now entered a new secular uptrend in inflation and commodity prices.
The next filter is the business cycle. We’re currently in business cycle number 35 since the 1850s. Business cycles typically last 4-5 years. Martin, our resident expert, will dive into this later and share which stage we’re in—early, middle, or late—which informs our portfolio strategy.
Next are intermediate-term market shifts—typically 10-20% moves that occur two or three times a year. We use our proprietary “fuel tank” tool to gauge whether markets are overheated or oversold.
At the portfolio level, our emphasis is on quality, value, and income—lessons learned from those journals I mentioned earlier. That’s what we focus on in your accounts.
In terms of disciplines, our strategy integrates:
- Secular and macro influences
- Business cycle analysis
- Fundamental analysis (company earnings, management, etc.)
- Technical analysis (price movement trends)
- Sentiment analysis (understanding investor psychology)
Sentiment is often the missing ingredient in many processes. In fact, I often say you might study psychology instead of finance to become a better investor.
Joe’s Summary on Today’s Environment:
- Secular outlook: Rising populism (workers vs. elites), fiscal dominance (government spending limiting Fed flexibility), and likely ongoing inflation.
- Business cycle: Later in the cycle. The Fed is on hold. More volatility ahead.
- Valuations: Stocks are overvalued, over-believed, and over-owned—but there’s opportunity in value stocks.
- Technical: Long-term momentum is slowing, but we remain in an intermediate-term uptrend.
- Sentiment: May be the key to navigating what we expect will be a challenging and volatile market.
Our goal is risk management—because if we manage risk well, the miracle of compounding can take care of the rest.
Martin Pring: Thank you, Joe. Let’s talk about the 12-month moving average crossover—tested and found to be one of the best indicators by Robert Colby and Thomas Myers. There are two main outcomes:
- Bear Market: Price drops below the average and stays below.
- Whipsaw: A brief drop below the average followed by a strong rally.
Recent data suggests we’re in a whipsaw scenario—supported by positive momentum indicators.
Sentiment–Univ. of Michigan expectations survey shows extreme pessimism, now rebounding—often a bullish signal for stocks.
Leading economic indicators are showing signs of softening, but no confirmed recession yet. We’re watching momentum across sectors. When fewer sectors trend up, investing becomes more selective.
Our own recession indicator (Pring Turner Leading Economic Indicator) hasn’t yet crossed into recession territory. Since the 1950s, it has reliably predicted every recession except for the pandemic shock of 2020.
Tom Kopas: Thanks, Martin. Also, thanks to Joe and Martin for laying the foundation of our investment process. To new clients—welcome! We’re glad to have you with us.
A quick recap: It’s still a bull market, but a choppy one. In March, quality dividend-paying stocks were up while mega-cap growth names were down. In April, everything fell due to tariff concerns, especially growth stocks. High quality value stocks held up much better. But markets rebounded in May—a classic rebound that we refer to as the “beach ball” effect.
Our approach—quality, value, income—is an important layer of risk management and helps cushion declines.
Jim Kopas: Right. And as Joe told me early in my career—studying psychology might help more than finance. The CNN Fear & Greed Index illustrates how investor emotions shift. Recently, fear reached extremes—setting the stage for the rally we just saw.
Our Advanced Investment Barometer helps us gauge the primary market climate:
- In early 2025, it was at the maximum “100” level—very bullish.
- Today, it’s near the caution/red zone.
We’re not calling for a bear market, but the risk has risen. Like driving in the rain, we’re slowing down—more caution, but still participating.
Let’s talk portfolio positioning. Using a typical conservative growth strategy as an example:
- Stocks: 30–70% range
- Bonds: 10–50%
- Cash: Flexible
Today, we’re at:
- ~58% stocks
- ~17% bonds (short-term Treasuries only)
- ~26% cash (in Schwab US Treasury money market fund earning ~4%)
We’ve done some house cleaning—sold some positions, allowed bonds to mature without reinvesting, and built cash for new opportunities.
You might notice more money market fund activity. It’s normal and has no tax consequences. These funds pay much more than idle cash. Let us know if you expect a large withdrawal—we can access funds the next day.
We’re still riding the bull—but we’re alert and adjusting. Volatility is up in 2025, just as we expected. Still, we believe in growing your portfolio while actively managing risk. As we approach our 48th year as a firm, we thank you for your trust and support.
Pamela: Thanks, everyone! We’ll now open it up for questions. A reminder: this event is recorded, and the replay will be available within two days. If you’re leaving early, please consider filling out our quick 30-second anonymous survey to help us improve.
And remember—our whole team is here for you. Feel free to reach out to me, Katie, Tom, Jim, or anyone on our team with questions about your portfolio or today’s presentation.