“In 1981, adding $1 to the national debt was associated with a $3.15 increase in GDP. By 2024, that had fallen to only $0.81. That means government debt now—today—has a negative impact on GDP. Every new dollar of debt literally slows down the economy”…. John Mauldin, Thoughts from the Frontline, June 28, 2025
“Congress is tired of fighting over the debt ceiling every year. The White House is tired of it. BUT … no one in the fight over the debt ceiling has any interest in lowering the actual debt” …. The Bonsen Group, July 11, 2025
Where Are We, End of June 2025?
We have the new “Big Beautiful Bill” – but whether you are for, against or somewhere in the middle, the national debt is still the elephant in the room. We live in a world now where government debt has a choke-hold on all of us. We’re slowing down and the debt is behind us gaining speed.
I might as well have copied the newsletter from May, because June was a carbon copy – it was a great month for stocks and especially our holdings. I know I’ve asked this before, but how curious is it that the “dividend aristocrats” (see NOBL below, companies that simply keep paying ever higher dividends) made less than 1% while technology and momentum funds made 6, 7, even 8%?
The conclusion overall, however, is that we are in a bull market. Therefore, we stay bullish until something changes. There is such a thing as the “Presidential Election Cycle Theory” which shows that generally the first 2 years of a new U.S. President are weaker (for stocks) than the second 2 years. This is because of change and uncertainty. Also, the seasonally weak period (Sept – Oct) lies just ahead. On the bullish side, interest rates will certainly be falling, probably by year end and at the latest, by May. This should be bullish.
Repeating the below
I’m now tracking the Cliffwater Enhanced Lending Fund (CELFX) and Cliffwater Corporate Lending Fund (CCLFX), which are mutual funds, with quarterly liquidity. You can read more about them on their website: https://www.cliffwaterfunds.com. You will see the monthly returns, every month going back 4 years. Of course, 4 years is not necessarily as long as you think, but they did make money in 2022 (bear market year), and they distribute dividends of approximately 10%. The downside to the funds is you can only sell them quarterly.
Following is the performance of our funds and the market indexes in June:
| Jun-25 | |||
| S&P 500 | 5.09% | ||
| Nasdaq (technology) | 6.64% | ||
| Dow 30 | 4.47% | ||
| NYSE Composite | 3.46% | ||
| Russell 2000 (small companies) | 5.44% | ||
| US Aggregate Bond | 1.25% | ||
| FBCG | 8.11% | Fidelity Blue Chip Growth | ETF |
| NOBL | 0.89% | Dividend Aristocrats | ETF |
| RSP | 3.43% | Invesco S&P Equal Wt | ETF |
| VBR | 3.67% | Vanguard Small Cap Value | ETF |
| TMFC | 5.39% | Motley Fool 100 | ETF |
| QQQ | 6.38% | Invesco QQQ Nasdaq 100 | ETF |
| SPMO | 6.97% | S&P 500 Momentum | ETF |
| XSMO | 3.38% | Invesco Small cap Momentum | ETF |
| XMMO | 3.74% | Invesco Midcap Momentum | ETF |
| FBGRX | 8.08% | Fidelity Blue Chip Growth | stock mutual fund |
| OBMCX | 8.78% | Oberweis Micro-Cap | stock mutual fund |
| FSLVX | 2.62% | Fidelity Large Cap Value | stock mutual fund |
| FSMVX | 4.58% | Fidelity Mid Cap Value | stock mutual fund |
| FCPVX | 4.47% | Fidelity Small Cap Value | stock mutual fund |
| AGGH | 3.97% | Simplify Aggregate Bond | ETF Income Fund |
| BUCK | 1.02% | Simplify Stable Income | ETF Income Fund |
| CDX | 1.12% | Simplify High Income | ETF Income Fund |
| MTBA | 1.45% | Simplify Mortgage Bond | ETF Income Fund |
| TUA | 1.66% | Simplify Short Treas Bond | ETF Income Fund |
| CCLFX | 0.74% | Cliffwater Corp Lending | income mutual fund |
| CELFX | 0.81% | Cliffwater Enhanced Fd | income mutual fund |
| CFRAX | 0.71% | Catalyst floating rate | income mutual fund |
| EIFAX | 0.76% | Eaton Vance floating rate | income mutual fund |
| FFRAX | 0.89% | Fidelity floating rate | income mutual fund |
| RNDLX | 1.44% | RiverNorth Strategic | income mutual fund |
| FAGIX | 3.11% | Fidelity Capital & Income | income mutual fund |
| Starwood REIT, class D | 0.26% | May* | real estate investment trust |
| Blackstone REIT, class I | 0.50% | May* | real estate investment trust |
| Fidelity Credit Fd, class I | 1.49% | May* | private lending trust |
| Blackstone Credit Fd, class I | 0.90% | May* | private lending trust |
| Blackrock Credit Fd, class I | 1.62% | May* | private lending trust |
(Courtesy Morningstar Workstation)
* 1-month reporting lag
Following are your May investment results:
We should talk if you would like to review exactly where you stand or if we should consider a change. I am available at your convenience. I have Google Meet in case you would like to do a video conference. Also, please consult your Fidelity statement for advisor fee information.