No one knows when a “crises of confidence” will occur that will send the markets reeling, but it is inevitable. However, you can’t just sit in cash awaiting Armageddon and/or close your eyes with a buy-and-hold (buy-and-hope) either. That will prove catastrophic for long-term financial plans. There are ways to approach this market.
Our strategy of “picking up nickels and dimes in front of the steamroller,” which focuses on income and dividends, has been very rewarding. In addition, our biased market neutral approach, which captures the dividends but hedges some of the risk, appears just right for today’s environment. Plus, investors must be alert and nimble as there will be a time in the near future when there will be a call for safety, so you must have an exit strategy.
Regards – Keith Springer