We believe that cash and bonds have unseen risks that are often overlooked. Equally we think the benefits of holding stocks offset their more overt risks over time, if purchased at reasonable valuations. The Federal Reserve has pegged short-term interest rates at zero and has driven all Treasury yields to the lowest levels in history - Financial Repression. We believe the Fed's intent is to make owning traditionally 'safe assets' as risky and potentially unprofitable as they were in the 1930s and '40s, this time to help the housing industry and encourage investment. Frankly, we struggle to explain Financial Repression to our family and friends even though it is key to RiverFront's investment thesis. To us, it means the systematic and deliberate process of destroying wealth and purchasing power. It is 'stealthy' because there is no decline in the perceived dollar value of these 'safe assets' and inflation is low enough that investors barely notice the declining buying power of their assets in the short term. In the long run, this slow erosion of portfolio value can be devastating (see Weekly Chart).

David Fuller's view I always find The Weekly View interesting and this is one of the very best issues, in my opinion, particularly in terms of the big picture outlook. I suspect that many subscribers will not only read but also retain this issue. Also, the educational value of the concluding graphic is enormous, not least because history is repeating itself.