1. Projections and Portfolio Transitioning
Brian Lee
Multi-Bank Securities, Inc.
February 5, 2018

2. But First…Super Bowl New England? Philadelphia? Prop Bets?
What color liquid will be poured on the winning coach?
Lime/Green/Yellow - 9/4
Orange - 5/2
Red - 2/1
Clear/Water - 4/1
Blue - 7/1
Purple - 10/1

3. Quick Investment Notes
Must follow North Carolina General Statute
Develop an investment policy
Ask peers for any recommendations
Policy examples
Investments
Accounting questions
Contact the Local Government Commission to clarify

4. Quick Investment Notes (Continued)
Follow the SLY acronym:
Safety
Liquidity
Yield

5. Where Are We Going?

6. December 2017 Fed Dot Plot
Source: Bloomberg, January 18, 2018

7. Comparing December 2014 to December 2017
Source: Bloomberg.com, January 18, 2018

9. Yield Curve Normal Yield Curve Short-term lower than long-term
Flat Yield Curve
Little difference between short-term and long-term
Inverted Yield Curve
Short-term higher yield than long-term
Image Source:

10. February 2014 Compared to February 2018
Source: Bloomberg, February 1st 2018

11. February 2017 Compared to February 2018
Source: bondsupermart.com February 1st

12. February 2017 Compared to February 2018
Source: bondsupermart.com February 1st

13. Inverted Yield Curve and Ensuing Recession
Start of Inverted Yield Curve
Start of Recession
Lag Time (Months)
August 1978
January 1980 17
September 1980
July 1981 10
December 1988
July 1990 19
February 2000
March 2001 13
December 2005
December 2007 24
Substantial lag time between inverted yield curve and the start of a recession
About a year and a half for the economic slowdown to hit after an inverted curve

14. Quiz Time - College Basketball
Who scored more points in their career?
J.J. Redick
Tyler Hansbrough
Answer: Hansbrough with 2,872 (Redick 2,769)
2. Since 1990, which team has had a better record against Michigan State?
North Carolina
Duke
Answer: Duke 12-1 (North Carolina 9-3)

15. It’s Not All Doom and Gloom

16. Transitioning Adapting your current portfolio?
Jumping in again/starting for the first time?
Maintaining?

17. Adapting Higher interest rates
Are you taking advantage of the current environment?
Different investment vehicles
Long-term/short-term
If longer, should you shorten up?
If shorter, should you look longer?
Keep in mind the general market and what may happen in the future

18. Adapting the Portfolio

19. Jumping in Again/Getting Started
Getting comfortable
Investment policy
Understand the investments
Having a plan
Matching up
Ladder/staggered approach
How much?
Conservative
Dip your toe in

20. Jumping in again

21. Getting Started

22. Maintaining Anything worth changing? Adding to the portfolio?
Looking longer?
Count the investment income!

23. Laddered Approach Maintained

24. Overview
Understand North Carolina General Statute /your investment policy
Reach out to peers and trusted investment professionals for rates/ideas/options
Take some time to keep an eye on the Federal Reserve’s thought process
Keep an eye on the yield curve
Look at potentially adapting, jumping back in or maintaining your current portfolio

25. Overview Thank You Questions?
DISCLOSURE
Multi-Bank Securities, Inc. (MBS) cannot be held responsible for errors regarding time and/or price on buy/sell requests. Information provided in this presentation has been prepared from sources known to be reliable, but is not guaranteed and is not a complete summary or statement of all data necessary for making an investment decision. This is for informational purposes only and does not constitute a recommendation; please confirm all information before investing. Securities discussed are subject to availability and change in price and yield. Changes to assumptions may have a material impact on returns. Past performance is not indicative of future returns. For institutional investors only.
For additional information, please contact:
Brian Lee
(866)
About Multi-Bank Securities, Inc.
Questions?