The following quote (and video), along with our own models, speaks to our stubbornness around remaining hedged right here:
"Stock investors should hope for the best but prepare for the worst when it comes to gauging the outlook of the US economy. Soft-landing optimists have a case to make, yet the historical evidence is overwhelmingly bearish when it comes to the end of previous Fed hiking cycles. Equities face steep losses if the economy sees a “softish” or hard landing.
In the 11 times when the Fed has tightened monetary policy to combat inflation since 1965, stocks escaped largely unscathed only about three times. The other occurrences saw average peak-to-trough losses of nearly 30% in the years after interest rates peaked."
-- Tatiana Darie (Bloomberg)
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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.
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