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Southern Capital Services TV Interview
What is an Independent Registered Investment Advisor (RIA)?
An RIA is in the business of giving advice.
An independent RIA is not owned by another company or institution.
An RIA has a Fiduciary Responsibility to their clients. They are legally required to put the client’s interest first. This is a higher standard that what is required of brokerage firms, which is the suitability of an investment for an individual client.
An RIA is typically compensated by fees for advice, rather than commissions on buying & selling.
An RIA is regulated by the Securities and Exchange Commission (SEC) or the state in which they operate.
The events of the last week have caused us to reverse our recent defensive move. First, the election took place with virtually no civil unrest and second, Pfizer announced that the testing of their Covid-19 vaccine showed amazing 90% successful results.
Going into the final days before the election, the race has tightened significantly in the battleground states, consequently the threats of strife and violence have greatly increased. This is unprecedented for the United States which is considered to be the most stable democratic-republic in the world. There are reports that both the left and the right are preparing for possible conflict. A number of cities are boarding up in advance to prepare for post-election violence. This is the primary source of the uncertainty that has prompted us to increase our short-term treasuries plus cash to the 50% level.
The secondary source of the uncertainty is the response to the Covid-19 spike in cases, especially in Europe. We are not judging whether the lock downs are an appropriate response to deal with the virus or not, but the effects would be disastrous for their economies and would have an effect on global trade.