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Marko Kolanovic: Unless There’s An External Volatility Shock, Equity Exposure To Increase
Earlier this year, when many market participants were convinced that the economic apocalypse was nigh and that stocks should be trading accordingly, JPMorgan's Marko Kolanovic very calmly explained that, despite being dismayed at the extent to which a variety of factors conspired to deep-six confidence during the December rout, the S&P had a date with 3,000.
At the time, some commentators of a cynical persuasion, and even some mainstream financial outlets, adopted a somewhat derisive tone t
H-Man, sounds like we go with the flow and the flow is up for a period of time. But the winds of the fall may have another story to tell. No one ever jumps ship until the boat is sinking. Right now the boat is taking water but everyone is hoping the pumps will work. We will see what happens when the water becomes ankle or knee deep and it may already be there.
Various signs point to an up market being more likely than a down market in the near term. Fed cuts coming, rising DCF valuations, still-positive domestic US data, yield curve de-inverting, low expectations for 2Q reports, FOMO, TINA, all the other word salads.
What I struggle with is, when the equity portfolios you manage are +22% YTD, isn’t the prudent thing to dial back the greed and take a goodly handful of chips off the table? Not sure anyone remembers TANSTAAFL but . . .
I should add for near-term positives, high cash positions and pain trade.