Michael Farr, president of the Washington investment firm Farr, Miller & Washington. (Photo by Philip Bermingham) (Photo by Philip Bermingham)

When he isn’t prognosticating on CNBC, Michael Farr, president of the Washington investment firm Farr, Miller & Washington, is managing $1 billion-plus of client money.

With the S&P 500 crossing an all-time high of 2,000 last week and the Dow Industrial Average nesting near record territory, I pinged Farr and asked him to tell us what’s going on.

Think of this as a reality check to be consumed with a long, cool end-of-summer beverage on this Labor Day.

Herewith, Farr’s thoughts:

“We might describe the current investment climate as ‘Goldilocks,’ as incoming economic data has been neither hot enough to warrant drastic Fed action nor cold enough to start worrying about another recession. Moreover, with interest rates very low and scant investment alternatives, investors cling to a mentality that has been dubbed ‘TINA,’ for ‘There Is No Alternative’ to stocks. Those who have worshipped at this altar have done very well over the past five-plus years.

Honor Beer — coming soon from Honor Winery. (Honor Winery)

“I remain very concerned about the fallout from the Fed’s chosen course of action. It simply does not make sense to address the problem of too much debt by encouraging more irresponsible borrowing.

“In addition, I am highly troubled by the Fed’s attempts to manipulate stock prices as means of jump-starting job and economic growth. The Fed’s ultra-loose monetary policy has long since reached the point of diminishing returns. The longer we walk this path, the greater the systemic risks. These risks include the inflation of new asset bubbles and the widening of the wealth and income gaps between the rich and the middle class. It is time we get off this treadmill of boom and bust that has characterized the Fed’s monetary policy for the past 15 years.

“It’s easy to become complacent when the market is going up. If the rule is buy low, this isn’t low. These are all-time highs. There is no need to swing for the fences, and there is no need to take on more risk. This market will correct at some point. Make sure you know what you own, why you own it, and that you remind yourself that it’s normal for markets to go down every so often. Make sure you have a seat when the music stops!”

Mixing beer and wine

David Keuhner’s Honor Winery, whose line of Honor wine is a tribute to veterans, is branching out. The company is launching a series of craft beers this week, including Honor Gold, Honor Warrior Indian Pale Ale and Honor American Pale Ale.

“The short version is, we were contacted by a brewmaster whose father was a retired Marine who wanted to make beer recipes for us. He proposed launching the beer.”

At first, Keuhner — a self-professed wine guy — demurred. But the more he studied the proposal, the more he became convinced there was a business there.

“Recent studies show that the craft brew industry has been growing at 20 percent a year for the last five years,” said Keuhner, 44, who has a long history in the Washington hospitality sector.

The beer should hit in the next two to four weeks in Virginia, North Carolina and West Virginia. He already has a contract with a brewer to produce an initial 700 to 1,000 kegs a month to start.

Keuhner has been producing wine for the last two years, in addition to consulting and creating wine experiences for select clients around the country. That includes finding wine destinations, creating corporate wine gifts and helping organize wine dinners he is preparing for a pair of elite collectors in Houston.

Keuhner is acquiring two acres of grapes in California’s Russian River Valley that will become his 2014 Pinot Noir.

The Honor family of wines includes four varietals: pinot noir, cabernet, cabernet Franc and a blend known as GSM. Keuhner said the Honor line, which sells for $49 to $89 per bottle, has sold around 3,000 cases.

The wine is now available in 10 states, and is expanding soon.

He said his two Napa Valley warehouses were not damaged in last week’s Northern California earthquake, which may have wreaked havoc on barreled wine for the 2013 vintage.

“We were considerably lucky,” Keuhner said.

The Buzz hears:

Timothy R. Schantz joined the District-based History Factory last month as managing director for its archives and content. Schantz joins from the Protestant Episcopal Cathedral Foundation, where he was chief operating officer. Founded by Bruce Weindruch, the History Factory builds Web sites, makes films, writes books and creates exhibits for clients around the world, be they massive oil producers such as Saudi Aramco or defense giants like Lockheed Martin, Little League, Wrigley, Whirlpool, Zurich Insurance, Edward Jones, Brooks Brothers, USAA and Morgan Stanley.

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