ORLANDO, FL--(Marketwired - Jun 18, 2015) - Wisepath Financial, LLC reports with major Wall Street indicators performing at bull market levels over the last several years, George Soros, hedge fund billionaire is building his position. How high will the markets go and what is your broker's strategy if things take a turn for the worst?
On June 17, the minutes and notes from the May 2015 meeting of the Federal Reserve were made public, and Wall Street reacted in a bullish fashion. Not long after the minutes were released, the Dow Jones Industrial Average and the S&P 500 both posted record highs. Even though these two indices gave up some of their gains by the end of the trading day, it is important to note that they are still at historically high levels (1).
Just a couple of weeks before the minutes of the Federal Reserve meeting were released, the S&P 500 had already gone 2,280 days of a bull market run. Two weeks later, the S&P 500 was trading at an astonishing rate of 18 times its earnings, and 32 of its companies posted 52-week highs. What is even more impressive is just how long of a bull run this has been for the S&P 500; according to a May article on CNBC, the S&P 500 has gone more than 1,400 days without experiencing a 10 percent correction (2).
The figures above clearly indicate that volatility is high for Wall Street. In retrospect, the market has been in a bull run since 2009 (2), and a correction could be imminent. Why isn't the financial news media sounding the alarm about this?
Mario Beatrice, an Independent Advisor Representative who runs LowRiskMutualFunds.net and WisepathFinancial.com explains the current climate: "The last time Wall Street experienced a comparable bull run in modern history was from 1987 to the year 2000; those were the heady days of irrational exuberance, the Dot-Com Bubble and pre-millennial carelessness. After the spectacular crash in the early 21st century, the financial focus switched to the American real estate bonanza and the subprime mortgage meltdown, and we all know how that ended up. In the run-up to those two major market crashes, average Americans had greater participation; they were either getting started in day trading or glued to CNBC because they paid attention to their 401(k) portfolios. Later, they became homeowners and property flippers who took out risky mortgages. This time around, average Americans have sort of sat on the sidelines; they have been worried about unemployment, low oil prices and inflation. Not everyone is hooked on this current bull run, though."
Mr. Beatrice is referring to major investors such as billionaire George Soros, who recently filed statements that indicate he is $1.1 billion short on the S&P 500 (3). Mr. Beatrice explained the rationale behind taking such a position on the market: "Here we have George Soros, a very successful trader and investor, ready to cash in on the coming volatility of a major S&P 500 correction. Taking such positions on the market is not uncommon for Soros, and he is known to have historically profited from market pullbacks."
Expanding on the potential future volatility of Wall Street, Mr. Beatrice continues: "When you see George Soros taking such a position on the market, you tend to pay attention. Not many other investors can take a similar position, but those of us in the world of low risk mutual funds pay close attention to these developments. Even your best mutual fund may not offer protection during market downturns and recessionary periods, and that is the business that we are in. We are students of the market, and thus we know about economic recessions, their effects on the market, and how to make sure our clients are protected."
On the issue of recessions and low risk mutual funds, Mr. Beatrice explains that recessions take place every five to seven years: "Since 1900, there have been 22 recessions. It is important to note that not all of them are like the Great American Recession, from which we have been in a state of recovery over the last six years. We think that everyone should have a protective strategy for when the next recession hits, which tends to be prefaced by corrections on Wall Street. Investments should be structured in a sustainable manner; they protect assets and avoid major losses in turbulent times, and that is what we recommend."
In conclusion, Mr. Beatrice comments on what individuals should focus on before volatility strikes: "Now is the time to ask questions and start looking for the best mutual fund or other low risk mutual funds and investments that will protect their portfolio. Before touching on the technical matters of asset allocation and portfolio diversification, it is time to ask your broker whether he or she has a defined 'sell' strategy to protect you for the coming downturn. Ask your broker about money management and tactical asset allocation strategies as well as positions to protect your principal while still being profitable. These are questions that managers of low risk mutual funds should be able to answer logically."
About WisePath Financial
Wisepath Financial, an independent family operated company, was founded by retirement and investment planners. We specialize in working with the conservative, those nearing retirement, and those who are already retired.
Our comprehensive wealth management strategies are specifically designed for those who enjoy participating during opportunistic growth periods, but have the ability to maintain a defensive posture during times of excessive volatility. Our combination of strategies helps to minimize and mitigate the risk of moving backwards financially.
1. Reuters, May 20, 2015 (uk.reuters.com/article/2015/05/20/markets-stocks-usa-idUKL1N0YB2BF20150520)
2. CNBC, May 7, 2015 (cnbc.com/id/102651776)
3. Seeking Alpha, May 20, 2015 (seekingalpha.com/article/3198066-george-soros-increases-his-s-and-p-500-put-position)
Contact Information:
CONTACT
Mario Beatrice
Wisepath Financial, LLC
mario@wisepathfinancial.com
407-878-7238