There wasn’t a lot of news from the G7 summit meeting this week, save for the fact that the United States is still formulating a strategy on how to deal with ISIS. Photos from the gathering are actually making more news, including this photo of German Chancellor Angela Merkel and President Obama.
Many are guessing at what was being said; one world leader is obviously quite animated, while the other seems really calm…tell me your best guess?
The slow drift is gaining momentum to the downside with the major indices closing near session lows Monday. Anxiety is mounting and many are very worried.
A lot is going on in the world. Right now, investors are concerned whether this bull market has run out of steam. Here are just some of the tweets I received Monday night.
Moreover, it’s not just individual investors. However, more and more big time pros are worried too, including mega hedge fund manager Leon Cooperman, who points to four factors:
- Recession
- Euphoria
- Geopolitics
- Federal Reserve
Here’s the thing: Picking the top is as dangerous as picking the top. In fact, we never know until they’ve been formed. I know a lot of people who have missed the entire rally by guessing on a pullback. Could we be in the midst of a correction or something worse at this moment?
Honestly, I don’t know about a correction and I think it is too early to talk about a crash- let’s review
Cooperman’s concerns:
- There is not a recession. It is just a slow-motion recovery made possible by the DNA of capitalism in America.
- There is no euphoria, even if margin levels are at all-time highs. People are dumping American mutual funds and exchange traded funds (ETFS).
- Geopolitical risk in general is always a possibility of being a Black Swan, although I am not sure what happens outside of Greece, which is a wildcard.
- The Fed will hike rates and the market will dip, but if they do it at the right time, the dip will be a huge buying opportunity.
Still, the market is long overdue for a pullback. We raised more cash yesterday. For now, I am looking to buy dips and I would actually like to see a meaningful pullback. Sure, it’s painful if you have only been in the market for a couple of years, but this rally needs to be tested.
This isn’t the time to panic or to be licking your chops. Make sure you have cash and touch base with your rep or the research desk.
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