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| You're Protected: From worst market sell-off Since 2008 |
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As always, we want our clients to be on top of the markets and
educated to what is going on and more importantly updated on how
their wealth is being managed.
See the full PDF version of this special commentary as well as the archive in our Market Info Section.
AUGUST SPECIAL REPORTAs always, we want our clients to be on top of the markets and educated to what is going on and more importantly updated on how their wealth is being managed. The fear factor is obviously alive and well these days. We have experienced one of the worst 2-week drops on record. The US debt situation, which has now caused a downgrade to their credit rating, spurred on a fresh wave of selling today. However, the Federal Reserve meets on Tuesday. The U.S. debt downgrade that occurred over the weekend may press the Fed's hand to make an announcement regarding the start of quantitative easing (QE – i.e. Fed's injecting money into the markets). Essentially this will be QE3 (third time the Fed’s are doing this). The fresh lows today may just be the market panic bottom. But picking a bottom is like trying to catch the proverbial falling knife. So while the market sorts itself out, the place to remain is safely on the sidelines with cash on hand. In the intermediate to longer term, both stocks and commodities should move higher given the amount of quantitative easing that is to come in both the US and in Europe. But at this juncture, in similar fashion to what happened in late 2008, the market has the ability to take everything lower as margin calls are met and fear reigns supreme. We were largely in cash starting last week in our Tactical Growth Strategy and entered this week 100% in cash. As you can see from the chart below (see full PDF), our core ETF strategies have had us in cash since early July. Overall, client accounts are not exposed to further sell-offs in our TGS & ETF strategies. Finally, a couple of hedge funds that we hold that adhere to our investment thesis are having a stellar year. During the month of August we have seen losses stay between 1 – 2% during this double digit sell-off. You can take comfort knowing we remain well positioned to avoid continued selling and on the flip side, our high cash levels will see us capitalize on the upside when the tide change... AS IT ALWAYS DOES! READ THE FULL NEWSLETTEROther headlines this month:
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