Although the above scenario can benefit stocks in the short term, lower aggregate demand will eventually trickle up and hurt earnings. Therefore the risk remains high and there will be a time in the near future when you will want to be in cash, so investors should stay on alert and nimble. In the meantime, it important to take what the market gives us.
Our strategy of “Grabbing 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.
That’s where we can help. Our active hands-on approach to managing portfolios can help you manage risk, deliver returns and give you peace of mind. If you would like to discuss the market, the economy or get a free second opinion on your portfolio, simply call (916) 925-8900 for a free consultation.