Are stocks in a bull market or is this still a bear market? Frankly, I don't put much energy into that question. The S&P 500 has now corrected about one-quarter of its prior losses. Bear market corrections of about one-third are not unusual, but I wouldn't bank on that.
Having failed to do anything effective to mitigate the second wave of foreclosures that is set to begin later this year, and seeing very little sponsorship in trading volume (despite good breadth), my impression is that we most likely are in a strong correcting rally in the context of an ongoing bear market. At the same time, cash-equivalents are yielding next to nothing, so it's unclear to what extent investors will decide that stocks are their only real alternative, which might allow a continuation of this advance.
Presently, the Strategic Growth Fund is well-hedged, but with enough call options to allow us to gradually and somewhat automatically reduce our level of hedging in the event that this advance continues. In other words, we are open both to the possibility of a bull market and to a continued bear market. To set an investment position that relies on the certainty of one outcome or the other would be courting trouble, in my view.
Read the complete commentary
Having failed to do anything effective to mitigate the second wave of foreclosures that is set to begin later this year, and seeing very little sponsorship in trading volume (despite good breadth), my impression is that we most likely are in a strong correcting rally in the context of an ongoing bear market. At the same time, cash-equivalents are yielding next to nothing, so it's unclear to what extent investors will decide that stocks are their only real alternative, which might allow a continuation of this advance.
Presently, the Strategic Growth Fund is well-hedged, but with enough call options to allow us to gradually and somewhat automatically reduce our level of hedging in the event that this advance continues. In other words, we are open both to the possibility of a bull market and to a continued bear market. To set an investment position that relies on the certainty of one outcome or the other would be courting trouble, in my view.
Read the complete commentary
