152 The Solari Report / 2018 Annual Wrap Up / Part Two Equities “Professional investors are wrestling with four big concerns, what I call the Four Horsemen of the Investing Apocalypse: · The Fed keeps on raising interest rates and shrinking its balance sheet, ultimately causing a nasty recession in the US and an outright depression in emerging markets. · China drops the trade war atom bomb by letting the yuan devalue sharply, sparking a global credit freeze that makes the 1997 Asian financial crisis look like a mild autumn day. · Italy and its populist government play hardball with Germany and the ECB in a way that Greece could not, leading to a Euro crisis that dwarfs the 2012 crisis. · Inflation, particularly wage inflation, gets away from the Fed, as their monetary policy tightening forces corporations to increase their risk-taking.” ~Ben Hunt, “You Don’t Have to Dance Every Dance,” Epsilon Theory, December 2018 S&P Large Caps (SPX), Buybacks (PKW) [Chart – SPX and PKW – https://hudmissingmoney.solari.com/wp-content/up- loads/2019/01/SPXPKW.png] U.S. Small Caps (SCHA), U.S. Mid Caps (SCHM), U.S. Large Caps (SCHX) [Chart – SCHA, SCHM, SCHX – https://hudmissingmoney.solari.com/wp-content/up- loads/2019/01/SCHASCHMSCHX.png] U.S. Aerospace & Defense (ITA) [Chart – ITA – https://hudmissingmoney.solari.com/wp-content/uploads/2019/01/ITA. png] Consumer Discretionary (XLY) [Chart – XLY – https://hudmissingmoney.solari.com/wp-content/uploads/2019/01/XLY. png] Consumer Staples (XLP) [Chart – XLP – https://hudmissingmoney.solari.com/wp-content/uploads/2019/01/XLP. png] Industrial Select (XLI) [Chart – XLI – https://hudmissingmoney.solari.com/wp-content/uploads/2019/01/XLI. png] U.S. Financials ETF (IYF) [Chart – IYF – https://hudmissingmoney.solari.com/wp-content/uploads/2019/01/IYF. png] S&P Large Caps (SPX), Buybacks (PKW)