CEOPROFILE
Michael Pento
President and Founder, Pento Portfolio Strategies, LLC
THE NEXT CRISIS Our exclusive interview on The Next Crisis with Michael Pento, President and Founder of Pento Portfolio Strategies, LLC, explores the impact of asset bubbles, Central bank policy and inflation upon the U.S. economy, as Executive Global take an exclusive peek behind the operation of a pioneering firm using proprietary macroeconomic models to determine investment strategies across an inflation/deflation and economic cycle spectrum. We examine the critical preparatory measures that should be taken for high net worth individuals and institutional investors to mitigate against risk. What three fundamental elements would you say characterise a successful money manager in 2019? I have a math-driven process that determines MP where the economy sits on a spectrum between deflation/recession and inflation/growth. This way you can eliminate much of the emotional impulses that cause you to panic when you should be buying and feeling complacent when you should be selling. It also gives you an opportunity to participate on the upside with the major averages but also profit from the inevitable economic downturn. This is especially crucial today because there is a record amount of debt, record low interest rates along with record high asset values. Yet, at the same time there is an earnings recession and economic growth is anaemic. Understand the unique investment environment of today. Never before in history has there been real estate, equities and bonds in a bubble---this is the case globally. This is why an active management style of investing has become imperative for your financial health. Have a transparent and non-opaque investment approach and make sure you communicate with your clients regularly regarding your strategies. PPS EG
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produces the podcast called the Mid-week Reality Check, which gives investors our proprietary insights on the economy and markets. Tell us about the advantages of the Inflation/ Deflation and Economic Cycle Portfolio proprietary investment model? The major advantage of this active strategy is MP that it allows you to participate in the upside of the market while also offering investors the opportunity to protect and profit from bear markets caused by recessions. It also can provide alpha during times of stagflation. EG
Prudent investors made significant fortunes during the Great Depression. If history inevitably repeats, what strategies could investors deploy to capitalise on the pending downturn? The IDEC Model not only identifies when a MP recession/depression is imminent but can also help determine when the debt-default process ends and when to get long the recovery. Once the market cap of equities corrects to a more normal historical relationship, it will become much safer to own a diversified basket of stocks. EG
Autumn 2019 •
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