The best hedges are cash and time, which work in tandem! The answer to fear of downside risk is not opening a NEW POSITION (hedge); there is simply no logic in such an exercise when fear of downside risk/losses is the premise! Risk of taxing one’s portfolio gains increase with a positioned hedge. Risk of…...
A lot has been going on in markets – aggressive Fed talk scaring investors, runaway commodity prices, war in Europe, COVID reopening in some parts and closing in other parts of the world. One should not be entirely surprised that all of this resulted in investor sentiment falling to 30-year lows (e.g., AAII % bulls…...
No Clear Path to Easier Financial Conditions Financial conditions are a key transmission mechanism for monetary policy and geopolitical shocks to effect the real economy and profits. Monetary policy tightening, for example, works by raising private sector borrowing costs on mortgages and corporate debt to slow growth and inflation. That process is well underway. The…...
Our goal as a trader is to push aside FOMO. Create a bubble for yourself, shut out the noise! Don’t look at other traders! Focus on what is important to your portfolio. If you cannot do this, you’ll forever be chasing the unachievable! ~ Seth Golden If you would like to watch the weekly State…...
When stocks and bonds send mixed signals, we listen to stocks more attentively. The underlying message is clear: Stay Defensively oriented because growth is going to disappoint. 1Q was tough but even worse under the hood. We chew on some charts to consider as we enter a pivotal earnings season. Listening Carefully…The internal message from…...
A 3-week winning streak for equities came to an end for the S&P 500 (SPX) this past week. April is generally one of the best performing months of the year, but it’s reasonable to suggest that investors are now more heavily considering the latest message from Fed Presidents and the recent FOMC minutes. The message…...
“I recommend the S&P 500 index fund and have for a long, long time to people,” billionaire investor Warren Buffett said at Berkshire Hathaway’s annual shareholders meeting last May. If you would like to watch our weekly State of the Market, please click the provided link. Have a great trading week everyone! Corrections are usually short/steep from…...
Cross-asset Strategy: While the geopolitical crisis and policy tightening are overhangs, risk assets have a number of supports that include strong activity momentum pre-shock, supportive labor markets, an ending COVID headwind in DM, and easing China policy stance. The early stages of Fed tightening should not be seen as a negative for stocks, as equities…...
The equity markets are on a 3-week winning streak, which is hard to accept given the quarter still ended in the red. As we enter the last month of the “Best Six Months” to own stocks, the market logged its first down quarter in 2 years, since the beginning of the pandemic. Going back to…...
WAR is stressing global supply chains, inflation rises yet the S&P 500 went RISK-ON over the last two weeks! Some are saying this is madness, a fake pump; stocks are divorced from reality. Here is the problem with that: Stocks are only divorced from YOUR reality! The S&P 500 doesn’t adjust to you. YOU adjust…...
