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The American (Debt) Jubilee, And The Current Correction

Mar. 07, 2018 9:37 AM ETDIA, QQQ, SPY, ECH, EEM, MDY, SLY, SPYG, XLB, XLF, XLI, XLK, XLV, XLY10 Comments
Christopher DeMaria profile picture
Christopher DeMaria


  • The debt and income Jubilee.
  • Interest rates - what has worked.
  • Sector leaders - what is working.
  • Market corrections and inflection points.

According to ancient Scriptures, the Jubilee is the pinnacle of restoration for those that had land and lost it. For those that have either fallen by misfortune or by their own choices, the land would be restored to them or their family line every 50th year. The Jubilee is culmination of seven 7-year periods, each of these periods offering the promise of freedom to bondservants and a year of rest in their land which is known as the Shemitah. The Jubilee is a time of great celebration across the land, because the Land that was lost was to be restored to the proper lineage of those who lost it. So every 7 years, slaves were freed and every 50 years, families that lost their land would get it back.

The land was lost for many reasons, including the inability to pay debts, negligent behavior, unforeseen misfortune, or many other possibilities, not unlike issues we currently face in the present. Author Jonathan Cahn, in his book titled “The Harbinger,” provided a wealth of valuable information regarding the history of Wall Street, the financial markets eerie relationship with the Hebrew calendar, and the 7-year cycle leading up to the Shemitah. Although this is not the focus today, it is worth reading, regardless of whether you believe in chance or some greater design. Before you dismiss this, as I almost did, the crash of 1987, the 2008 housing crisis, and 911 all occurred precisely at the beginning of these Shemitahs. Now let’s move on to how this affects us today and how markets are also affected by both long and short term cycles.

Inflection points

Inflection points are always interesting to observe. Some refuse to see the changes that are slowly making themselves known; they ignore the handwriting on the wall and sometimes suffer the

This article was written by

Christopher DeMaria profile picture
Christopher Gaith DeMaria is a member of the Global Community. Having lived abroad for more than 18 years, he studied in South America, Europe, Southeast Asia and the United States. Chris is the owner of DeMaria Financial Services and an Investment Advisor Representative with Kovack Investment Advisors, Inc. He began his career in financial planning and portfolio management in March of 1998 after earning a degree from Ohio University where he majored in Economics and minored in Business Administration. Chris focuses on achieving "positive" results regardless of how the market indices perform. Unlike some managers, Chris manages the risk of each  individual portfolio rather than remaining invested at all times. Chris strives to identify low risk entry points and conversely, uses a calculated exit strategy when market risk is high or positions are lagging or down. Chris does not try to beat an index every quarter. Instead, he is focused on the potential for low risk profits. If you manage risk well and avoid large corrections, you will naturally create much better results. There is no new thing under the sun Ecc 1:9 The headlines in the news change daily and market leaders change regularly but, the one thing that remains consistent over time is how humans react to stock market volatility (aka fear and greed). During highly volatile markets and market inflection points, human emotion is a consistent and measurable phenomenon that generally isn’t accounted for in any research report or stock analysis. This observation precipitated the creation of the proprietary market risk meter for quantifying said human emotion and consequent reactions to short term market activity. Regardless of education, wealth, knowledge, or any other factor that may make a person seem wise, people react the same way when fear or greed sets in. No matter how many times a fire drill is rehearsed, when an emergency presents itself, the exit is often not pleasant.This methodology is by no means perfect however, it is a best effort attempt to quantify the belief that many things will return to some sort of mean over time and that people consistently exhibit the same undulating responses to fear and greed. Consequently, it is possible to view the ebbs and flows of the markets as ocean tides. When the tide comes in, risk is higher and conversely, when the tide flows out, risk is lower. Although it is not possible to consistently predict exactly when a correction or bounce will occur, it is possible to determine when a change in trend is occurring. Furthermore, a sophisticated investor can often determine when there is more or less inherent risk in the market. It is also possible to examine whether the tide has come in further than normal, presenting greater risk or gone out further than normal, providing a rare lower-risk entry point. When risk is elevated, active investors should begin trimming losers, laggards, and potentially take partial gains from winners in  portfolios. Investors may also consider reviewing the types of positions worth  holding when things get ugly. Long-term asset allocation investors can look at  re-balancing portfolios by shifting equity gains to other less market correlated asset classes like bonds or cash alternatives. Some investors may also consider hedging strategies like selling calls, purchasing puts, or stop limit orders to try to mitigate risk. Conversely, when risk is lower, a plan of action should already be in place with a buy list of favored mutual funds, equities, and ETF's having been identified. Secondly, it is essential to identify a high volume, high volatility, downside trading day that is coupled with a strong reversal and 1-2 days' follow through. When all of these conditions are met, this methodology recommends purchasing equities.Methodology for determining favored sectors Christopher G. DeMaria has over 18 years of experience managing money for individuals, corporations, and foundations. While adapting from successes and failures throughout some of the most challenging markets since the Great Depression (1998 to 2016), his methodology has been continuously tested over that time in order to improve its reliability and effectiveness. Part of his investment methodology includes a quantitative approach to identifying changes in trends at early stages and continually monitoring their relative performance against one-another.  This process uses simple mathematical ratios (IE: SPY /EFA or SPY/XLB) to determine when one asset class is performing better than another. When properly calibrated, these ratios provide a precise moment when the trend in one asset changes compared to another.  This process is most effective when portfolio holdings are methodically adjusted based on different levels of market risk and relative asset class performance. As stated above, when risk is higher, portfolio holdings should be reallocated out of lagging or losing asset classes and moved into leading, lower risk, or non-market correlated assets. This process inherently frees up cash for future “lower risk entry points” when assets can be allocated back into equities and other favored assets. Essentially this is a systematic approach designed to attempt to purchase leading asset classes when market risk is lower and sell lagging and losing positions when market risk is higher. In the end, the goal is to buy low and sell high.ImplementationThere are three key factors to successfully implementing this portfolio management process. The first is having sufficient knowledge and understanding of the financial markets which takes time to acquire. The second is having adequate  time and dedication to develop skill. The third is having the proper discipline to continually monitor the process. Many individuals have some or even all of these characteristics but, simply lack the time, interest, or expertise to dedicate themselves to managing their own portfolios properly. With the exception of those whom are confident in their knowledge, skill, and discipline to manage this process, it is strongly advised to seek professional assistance.  HistoryThis Risk Managed Global Sector Rotation strategy has been well documented on Seeking Alpha during the most recent correction. Furthermore, a full cycle from high risk to low risk and subsequent recovery was well documented on Seeking Alpha in 2014.The Lows Still Appear To Be In...What's Next?Wed, Feb. 24th, 2016 (confirming successful retest of lows and providing actionable ideas)Weekly Leading Sectors Report Wed, Feb. 10th, 2016 (confirminglows and providing actionable ideas)In Hoc Signo Vinces... What Market Signs Are You Watching?Fri, Feb. 5th, 2016 (confirming lows and providing a macroeconomic overview)The Lows Appear To Be In... What's Next?Tue, Jan. 26 (confirming lows and providing actionable ideas)How Can You Identify Market Turning Points?... ReloadedThu, Jan. 21 (identifying lows, Dow Theory discussion and providing actionable ideas)2014 Full CycleThis Looks Like The Lower-Risk Buying Opportunity We've Been Waiting ForOct. 24th, 2014 (identifying lows and providing actionable ideas)Preparing For A Lower-Risk Entry Point In A Secular Bull MarketOct. 13th, 2014(preparing for the lows and providing actionable ideas)The Quiet Before The Little StormJul. 8th, 2014 (warning about higher risk and preparing for volatility and short term correction)How Can You Adjust Your Investment Strategy To Enhance Returns?May 28th, 2014 (explanation of a possible long term secular bull market and actionable ideas)

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information contained in this report or information provided does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation of an offer to buy or sell any security referred herein. Past performance may not be indicative of future result. No buy or sell orders may be given using the email, please call the above number to contact your Advisor. Christopher DeMaria is registered with and securities offered through Kovack Securities, Inc. Member FINRA/SIPC. 6451 N. Federal Highway, Ste 1201, Fort Lauderdale, FL 33308. Investment Advisory services are offered through Kovack Advisors, Inc. DeMaria Financial Services 865-332-5952 is not affiliated with Kovack Securities, Inc. or Kovack Advisors, Inc. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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