Author: Emily Frazier, Business Development Page 1 of 4

Dear Millennials: I hate to burst your bubble, but speculative Investing shouldn’t be your only investment.

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With my husband and I, and most of our friends, in our early to mid-thirties we all finally have some sort of investment accounts. Whether they are 401(k)s, Roths, joint savings accounts or IRA Rollovers we are all starting to take the shape of a grown-up. So instead of talking about whatever we used to talk about in our twenties at a dinner party, the new topic is investing (after the debate on vaccine mandates and when the Britney Spears documentary will come out). My greatest concern from these conversations is that it seems the majority of everyone’s portfolio is in some uber hot meme stock or crypto. Bottom line? New investors with their new life savings are as wide open to major risk as any of the wide receivers on the Cowboys offense (let’s not talk about the Broncos game). Don’t get me wrong, I traded some of that DWAC ‘spac’, have Shibu crypto in my Coinbase account, and am trying to hop on that hot uranium trade– but that’s our play money, not our serious money. Working in the financial industry over the last 10 years and with a firm that has managed money since 1986… I know what happens after bubbles burst, when major highs become major lows, and why black swans are less enjoyable than the movie. Knowing this is one thing, feeling it is another. Anyone that began investing after March 9, 2009 has never felt a true bear market. March 2020 was a major sell-off, but not a bear market. We, the blasted millennials, have never felt what a 50% loss in our major savings does to our psyche, goals, and children’s daycare funds. “Knowing” and “feeling” are completely different.

About two weeks ago I was having my coffee early in the morning before heading into the office. I had been mulling over some complex situations and remembered a book I bought called, “The Hard Thing About Hard Things: building a business when there are no easy answers” by Ben Horowitz. I plucked it right off the bookshelf and began reading. Ben is considered one of Silicon Valley’s most respected and experienced entrepreneurs, and early on in his book he talked about the beginnings of his first startup as the CEO of LoudCloud when the dot-com bubble burst:

“…It seemed like we were building the greatest business of all time. Then came the great dot-com crash. The NASDAQ peaked at 5,048.62 on March 10, 2000—more than double its value from the year before—and then fell by 10 percent ten days later. A Barron’s cover story titled “Burning Up” predicted what was to come. By April, after the government declared Microsoft a monopoly, the index plummeted even further. Startups lost massive value, investors lost massive wealth, and dot-coms, once heralded as the harbinger of a new economy, went out of business almost overnight and become know as dot-bombs. The NASDAQ eventually fell below 1,200, an 80% percent drop from its peak.”

I immediately thought, “Gosh this seems familiar.”  There is investor euphoria with investors willing to take massive risk just to get a piece of the pie. There are people investing in a crypto that is not tied to anything, with founders admitting it was created as a joke! The global economy is fragile as it reels from a global pandemic, inflation is here (whether the Fed wants to call it transitory or not), international tensions are high (yep, that didn’t go away), businesses can’t find employees and supply chains are tighter than a Skims bodysuit. The chart to the right was used in our most recent quarterly newsletter, The Full Spectrum. This chart shows that almost every bear market over the past 88 years has taken back, or repossessed, about 50% of the previous bull market gain. Robert Harmon, who oversees Spectrum’s retail clients’ portfolios, put the current state of the market in the best word picture. He said, “It’s like there is a bear market puzzle and once it is all put together, things are going to get nasty. And as it stands, there are only a couple pieces missing.” It just doesn’t seem like the time to play Russian roulette with all your savings. There are more intelligent ways to invest your hard-earned assets.

Every investor is different because every person has a different risk tolerance, need for security and goal for a certain investment account. My plea is to assess what you can truly stand to lose, because it can be truly lost. When you invest any assets, you are taking on risk. That is the deal of investing. This industry is heavily regulated and on every marketing piece (including this one!) there will be a myriad of disclosures at the bottom. One may read, “Past performance is not indicative of future results” and/or “Investments can fluctuate”. When you begin investing, and you’ve only seen (mostly) gains and have (mostly) been rewarded for the risk you took, you get a false sense of surety and security. At Spectrum, we believe that as an investor you don’t have to take unnecessary risk to be compensated, and I agree whole heartedly. Separate out your serious money from your play money. There is nothing wrong with wanting to participate in something fun and risky, or what the investment world calls, “speculative”. I just try and keep that to 5% of my portfolio. The other 95%? I have in actively managed mutual funds. Taking on risk is not a bad thing. As the saying goes, “the greater the risk, the greater the reward”. I can afford to take on greater risk in retirement accounts because the “life” of that money is longer than the “life” of the joint savings account that may be used for an additional down payment on our next home in 2 years. The sooner you need the money, the less risk you should take with it.

There is a saying that “Ignorance is bliss.” Ignorance in investing is not bliss, it can be extremely painful. I will end with an excerpt from the book Greenlights written by the wisest man on earth, Matthew McConaughey:

“Everybody likes to be in the know. Even when we lose two and win one, we believe the one more than the two. We believe the one winner we picked was a product of our truer selves, was when we met our potential and read the future, was when we were gods. The two losses, however, were aberrations, misfits, glitches in our masterminds, even though the math clearly makes them the majority. After the game is played, everybody kn-ewww who the winner would be. Everybody is lying. Nobody kn-owwws who’s going to win or cover the bet, there is no sure thing, that’s why it’s called a bet. There’s a reason Vegas and Reno continue to grow. They kn-owww we bettors love to believe we do. That is a lock.”

Spectrum has been actively managing client assets since 1986, call our Investor Services team today to discuss how our mutual funds can compliment your portfolio.

The Oil Market in 2020

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Oil 101:  An introduction to the oil market

At the time of writing this blog, a quick google search or inbox perusing will reveal oil market headlines that read something like this, “A few ominous signs in the world of oil..” Morning Brew; “A Serious Bearish Catalyst for Crude Markets”, “OPEC and BP Signal Pessimism in Oil Markets” nytimes. 2020 seems to take no prisoners, and the oil market did not escape its talons. The purpose of this article is to show the volatility and risk (specifically in oil) within the general commodities market if not actively managed by first outlining the market for oil. Oil is part of the commodities market. What is a commodity? Investopedia states, “a commodity market involves buying, selling or trading a raw product, such as oil, gold or coffee.” Think Tim Allen and Martin Short in the movie Jungle2Jungle. Remember when they didn’t sell all the coffee beans because Michael Cromwell (Tim Allen) was stuck in the Amazon meeting Mimi-Siku (his son) and the sell order didn’t go through to Richard (Martin Short)? They were stuck with coffee beans and went to a Russian buyer, it unraveled from there. A great movie, and also a great reminder of the commodities market- think raw product.

Who are the “oil market” suppliers?

Crude oil (also called petroleum) is a finite, naturally occurring fossil fuel found below the earth’s surfaces in reservoirs. These reservoirs (or deposits) are found around the globe. The top 10 oil reserves around the world are found in:

  1. Venezuela- 303 billion barrels
  2. Saudi Arabia- 267 billion barrels (ironically enough, the US company Standard Oil was the first to drill for petroleum in Saudi Arabia back in 1933. Source:
  3. Canada- 167 billion barrels
  4. Iran- 155 billion barrels
  5. Iraq- 145 billion barrels
  6. Kuwait- 101 billion barrels
  7. United Arab Emirates- 97 billion barrels
  8. Russia- 80 billion barrels
  9. Libya- 48 billion barrels
  10. United States- 47 billion barrels (the largest oil producers in order: Texas, North Dakota, New Mexico)

The United States was the first country to create an industry out of oil production, and it was spear headed by John D. Rockefeller through the Standard Oil Company and Trust. However, OPEC+ is always synonymous with the oil market, its price, and its supply and demand cycles. According to, the Organization of the Petroleum Exporting Countries was created in 1960 with the intention of being a permanent intergovernmental organization between the five founding members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The objective of this organization is to, “co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.”(Source:

Investing in the oil industry today

The first oil well to attract investors was an oil drill built by Edwin L. Drake for the Pennsylvania Rock Oil Company of New York in 1861. An investment industry was created to solicit funds for the purpose of drilling an oil well, and it began to evolve throughout the east coast of the US. Over 160 years later, there are multiple ways to invest in oil: Mutual funds, ETFs, oil futures, exploratory drilling programs, developmental drilling program, working interest program and rework programs, or even owning mineral rights. When it comes to investing, the question is often, “How can I make money betting on whether this is going to go up or go down? Especially for a commodity like oil, speculation is tied to the law of supply and demand.

Oil in 2020

The equilibrium of price and quantity has been challenged in 2020 due to the global pandemic and issues amongst the OPEC+ members. This kind of environment creates uncertainty and volatility. March marked the onset of the COVID-19 pandemic in the United States. As the pandemic shut down the global economy and the US, the demand for oil plummeted leaving a massive oversupply. Saudi Arabia, one of the founding OPEC+ members, slashed their official pricing for its crude oil essentially creating an “oil war” with other OPEC+ members, specifically Russia. There was further breakdown between these two members when they failed to reach an agreement on deeper supply cuts. This marked one of the biggest cuts to oil pricing in over 20 years. Their objective was in pushing the prices lower, demand would tick up and they could flood the market with as many of their barrels as possible. As COVID-19 sank its talons into the global economy further, speculation in the oil market (represented by Oil future contracts) was fueled by panic. Investors began an accelerated sell-off as delivery dates for WTI (West Texas Intermediate) approached. April 20th, West Texas Intermediate crude dropped by almost 300% and traded negative, an unprecedented event. Oil is traded on its future price and the May futures contracts were due to expire on that Tuesday. The traders were keen to offload those holdings to avoid having to take delivery of the oil and incur storage costs.

Investing in a commodity like oil can be an extremely risky and volatile investment. However, when it is given a small position size within a larger diversified portfolio it can contribute to positive alpha (returns) while limiting drawdowns within the greater portfolio. This is something that has been implemented with the Hundredfold Select Alternative Fund found in our AssetMaxx℠ program. The chart below shows the year-to-date performance through 10/31/2020 of the Hundredfold Select Alternative Fund (SFHYX) and the WTI Crude Oil futures. This is not indexed performance, and the chart splits the Active WTI crude oil futures on one axis (left) and the Hundredfold Select Alternative Fund (SFHYX) on the right axis. This chart is not meant to compare performance necessarily, but show the difference in volatility between the two.

The following is an excerpt from our most recent quarterly newsletter,

Hundredfold Select Alternative Fund (SFHYX)—The All-Season Investment

Navigating through one of the most challenging investment seasons in 2020 has once again proven to our investors that our active asset allocation strives to give them the peace of mind they require. Price declines of nearly 40% or more can make life-altering financial plans for investors. This has occurred three times since 2000. Changing market conditions happen so quickly now, that investors may not be able to handle the risks involved in a conventional portfolio. The Select Alternative Fund was created to utilize alternative investments where returns are not directly tied to the stock market, yet still provide comparable returns. Active management and diversification are the keys to its success. Formed with philosophy of King Solomon: “A cord of three strands is not quickly broken.” (Ecc. 4:13) the portfolio is divided into three parts, and diversified further within those categories. Currently, stocks are employed from 0% to 40%, using four 10% trading strategies; Bonds, from 0 to 120% using about ten different bond categories and rotational strategies; And commodities, from -50% to +50% using 10 different types of diverse commodities which may be either long or short positions. These strategies work together to complement each other with the objective of reducing risk and volatility, so the performance should not directly correlate to the stock market. For the first 9 months of 2020, SFHYX had a return +21.39% with a maximum drawdown of -4.3%. In contrast, the New York Stock Composite Index had a negative return of -6.94% for the first 9 months of 2020 with a maximum drawdown of -37.5%. The chart on the top right illustrates the past 5-year performance of SFHYX compared to the New York Stock Composite Index as well as the Aggregate Bond Index. The second chart below illustrates how actively the Fund is managed, showing asset class investments at various times over the last year, taking advantage of market opportunities when they present themselves, while reducing risk at other times.

Please see standard performance information below:

Annualized total return performance

Annual performance at net asset value (all distributions reinvested)


The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of any dividend or capital gains distributions. To obtain performance data current to the most recent month-end or a prospectus, please call toll free 888-572-8868  or visit for further details.

An investor should consider the investment objectives, risks, charges and expenses of the Hundredfold Funds carefully before investing. The prospectus contains this and other information about the Fund. The prospectus should be read carefully before investing. Distributor: Ceros Financial Services, Inc.

Advisors Preferred, LLC serves as Advisor to the Hundredfold Select Alternative Fund. The Hundredfold Select Alternative Fund is distributed by Ceros Financial Services, Inc. a commonly held affiliate of Advisors Preferred.  Hundredfold Advisor, LLC is the subadvisor to the Hundredfold Select Alternative Fund. Hundredfold Advisors is not affiliated with Advisors Preferred.

  • Inception date: SFHYX Sept. 1, 2004, HFSAX  Oct 24, 2012

Consider these risks before investing: Aggressive investing techniques, asset-backed securities risk, credit risk, counterparty risk, depositary receipt risk, derivatives risk, emerging markets risk, equity securities risk, foreign securities risk, high portfolio turnover risk, high-yield securities risk, holding cash risk, interest rate risk, leverage risk, master limited partnership risk, non-diversification risk, other investment companies risk and ETFs risk, prepayment risk and mortgage-backed securities risk, shorting securities risk, small and mid-capitalization risk, subadvisor investment strategy risk, tax risk, and floating rate notes risk. There is no guarantee the fund will achieve its investment objective. You can lose money by investing in the Fund. Please carefully review the prospectus for detailed information about these risks.


  • S&P 500 Index is a capitalization weighted index of 500 stocks representing all major domestic industry groups. It is not possible to directly invest in any index. The S&P 500 TR assumes the reinvestment of dividends and capital gains.
  • Barclays U.S. AGG. Bond Index: measures the underlying performance of the total U.S. investment grade bond market. It is a market value-weighted index that tracks the daily price, coupon, pay-downs, and total return performance of fixed-rate, publicly placed, dollar-denominated, and non-convertible investment grade debt issues with at least $250 million par amount outstanding and with at least one year to final maturity.
  • West Texas Intermediate Crude Oil Futures: The ICE West Texas Intermediate (WTI) Light Sweet Crude Oil Futures Contract offers participants the opportunity to trade one of the world’s most liquid oil commodities in an electronic marketplace. The contract not only brings the benefits of electronic trading a US light sweetcrude maker, but also brings together the world’s three most significant oil benchmarks on a single exchange: Brent, Middle East Sour Crude and WTI. This offers a reduction in collateral requirements through the offsetting of margins.

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