To survive in the next few months, you only need two assets, says this fund manager
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Another three million Americans have applied for unemployment.
And the markets are showing less resistance than they were, after the chairman of the Federal Reserve, Jerome Powell, pinned him down in the hope that global economies could quickly recover from the pandemic. And the warnings of big investors overpriced stocks were plentiful.
Our call of the day This comes from a fund manager who advises to keep things fast, which he does by trading only two instruments.
“We offer a very simple and scalable strategy involving the S&P 500 ETFs
SPY,
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and effective, "being in one or the other, Thomas H. Kee Jr., President and CEO of Daily stock traders and portfolio manager Logic of equity, he told MarketWatch in an interview.
Kee argues that a complicated and bulky portfolio, like some of the most popular with 20 or 30 stocks to follow, makes it difficult to manage risk in a timely manner.
"The ease of using simplification of a portfolio so that it only follows the market or is cashed in allows you to protect yourself quickly, and this is essential when the conditions of the market are what they are today, "said Kee, referring to a large market on Wednesday. The drop initially saw it go into cash, but then went on to buy the S&P 500 due to the magnitude of that drop.
Kee thinks we are in a “major depression era” in three phases, with the first arrival when stocks and Main Street collapsed in March. "The second step is when the stock market disconnects from Main Street and that's where we are now," he said.
This period, which is expected to last for months, involves a wave of "counterfeit notes" from central bank stimulus measures, which will keep markets even if there are "sharp and rapid declines" along the way. . In this phase, investors should "stay broad and follow the tide until the music stops," said Kee, whose models predict a 95% probability of new highs in Nasdaq and one 50% chance for S&P by the end of the year.
This brings us to the grim final phase, probably at the start of next year, when the Federal Reserve's stimulus policies end, debt levels become "ridiculous" and the Federal Reserve's solvency is being questioned, which could be a big problem for the financial sector and stocks. told me.
The third stage is usually "quick, hard and brutal," he said. And he has a small tip for 401 (k) players in the last step: go in cash. But in the meantime, hit the market.
The market
Dow
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S&P
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and Nasdaq
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ultimately, while European equities
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they are down and Asian stocks have also fallen. gross
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The graphic
A MagnifyMoney survey (thanks to Daily shooting) shows that about 50% of Americans have withdrawn or plan to withdraw money from retirement funds in the past 60 days, more than half to cover their expenses:
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