The chart above which takes into account inflation in order to plot 'real' returns is quite shocking. It seems that this financial crisis has been retracing the 1929-1949 bear market very closely indeed.
The run up from March 9th until now is almost unprecedented & the gains have been astronomic. Unfortunately, the rally has been built upon low expectations and cheap prices. But those expectations are now higher and the stocks are no longer cheap. These markets now have to justify their values and thats proving harder to do.
The rally is becoming unsustainable and is fast running out of breath. Volumes have been dropping gradually since March and rallies need to be fed.
The correction is coming and for my portfolio clients it will be an opportunity. They are cash rich and equity poor.
We expect all bond prices and commodity ETF's to drop in lockstep with equities and these will be our focus.
All savings plans less than a year old will dollar cost average, those with a considerable capital sum attached will be moved to a dominant cash position with possibly a small percentage switched to the CAAM Volatility World Equity Fund .
The question is this:
For those of you who are not my clients, I ask what are you doing to protect yourself from the gathering storm? More importantly, what is your financial adviser doing to preserve your wealth?
The next few weeks could be key. For many advisers who missed last years crash to your cost, it is a second chance. Should they miss the opportunity again, then you must surely reconsider your options.
The correction is coming and for my portfolio clients it will be an opportunity. They are cash rich and equity poor.
We expect all bond prices and commodity ETF's to drop in lockstep with equities and these will be our focus.
All savings plans less than a year old will dollar cost average, those with a considerable capital sum attached will be moved to a dominant cash position with possibly a small percentage switched to the CAAM Volatility World Equity Fund .
The question is this:
For those of you who are not my clients, I ask what are you doing to protect yourself from the gathering storm? More importantly, what is your financial adviser doing to preserve your wealth?
The next few weeks could be key. For many advisers who missed last years crash to your cost, it is a second chance. Should they miss the opportunity again, then you must surely reconsider your options.
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