By Barbara Kollmeyer
“We offer a very simple, scalable strategy that involves the S&P 500 ETFs SPY and cash,” being in one or the other, Thomas H. Kee Jr., President and Chief Executive of Stock Traders Daily and portfolio manager at Equity Logic, told MarketWatch in an interview.
Kee argues that a complicated and cumbersome portfolio, like some of the more popular ones with 20 or 30 stocks to keep track of, makes it tough to manage risk in a timely manner.
Kee believes we are in a three-phase “greater depression era,” with the first coming when stocks and Main Street crashed in March.
“The second stage is when the stock market is disconnecting with Main Street and that’s what we’re in now,” he said.
This period, which he expects to last for months, involves a wave of “fake money” coming from central bank stimulus, which will keep markets rising even if there are “swift and harsh declines” along the way.
In this phase, investors need to “stay broad based and ride the wave until the music stops,” said Kee, whose models are predicting respective 95% and 50% chances of highs for the Nasdaq-100 highs and S&P by year-end.
That brings us to the dark final stage, likely at the start of next year, when Fed stimulus policies end, debt levels get “ridiculous,” and the solvency of the Fed gets questioned, potentially a big problem the financial industry and stocks, he said.
Stage three is usually “fast and harsh and brutal,” he said. And he has a bit of advice for 401(k) players when that last stage rolls around — move to cash. But ride the market out in the meantime.
Source: Market Watch
https://www.marketwatch.com/story/to-su ... yptr=yahoo
