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This money manager warns that the bear market in equities still has a long way to go. Two strategic moves he’s making are:

As if everyone wasn’t nervous enough, bubble expert Jeremy Grantham warns that we’re facing the final throes of the superbubble. , he has been making crash calls for about ten years.)

Still, if the big ones are out there, it helps to prepare. today’s call Real Investment Advice portfolio manager Michael Lebowitz believes we may be in the early stages of a bear market. He suggests a simple bear market asset strategy because the buy and hold does not work in a sticky inflation environment.

In a blog post, he explains how the RIA repositioned its client portfolios to prepare for the bear market earlier this year.

“Sensing that the Fed is trying to pull liquidity out of the market, we have started reducing our risk from the first trading day of 2022. We will not only reduce our total equity exposure by selling stocks, but also a higher beta. We rotated from growth, changing stocks to lower beta stocks,” Lebowitz said.

By 2022-to-2022, the RIA portfolio has outperformed its benchmarks and all major stock indices by reducing the percentage allocated to stocks and the types of stocks it holds, he said.

As he explains, in 2004 $10,000 was invested in two scenarios. Buy-and-hold scenario A was always fully invested, while B was the same except he was during the 2008 bear market, when he was 50% in the S&P 500. , the rest is 0% cash income. Dividends were reinvested in both.

rear

Advisors say Scenario B is stronger because the exposure to equity has been cut in half over two years. The strategy has strengthened his portfolio by 41% over that period, but similar actions in 2020 and 2022 would have yielded even better returns, he said. Told.

In a follow-up comment to MarketWatch, Lebowitz said the RIA reduced its exposure in terms of allocations in early 2022, shifting to value stocks with lower betas (less volatility). It looks like the Federal Reserve is really about to turn around,” he said.

“For example, we gravitated from technology to utilities and healthcare. We also maintained inflation hedge/exposure to energy companies and some materials companies,” he said. His holdings include NextEra Energy NEE,
+0.15%,
Duke Energy DUK,
+0.30%,
AbbVie ABBV,
+1.61%,
Abbott Labs ABT,
+0.02%,
CVS health CVS,
+0.29%,
Albemarle ALB,
-4.12%,
ExxonMobil XOM,
-1.80%
and Devon Energy DVN,
-3.54%.

“Lower beta and less exposure have been big winners so far,” he said, noting that his portfolio had outperformed its benchmark by 5% by the time the market peaked two weeks ago. He also noted a 9% drop in the iShares S&P 500 Value ETF IVE, noting that value has outpaced growth.
-0.62%
22% drop in iShares S&P 500 Growth ETF IVW
-0.78%
so far this year.

Lebowitz believes the market is facing liquidity headwinds as the Fed shrinks its balance sheet and focuses more on sticky inflation than on the economy.

“This Fed has a very different mandate than any Fed before it,” Lebowitz said, worried that investors didn’t get it. “My concern is that this time it will be different.”

read: Bullish outbursts are common in bear markets.easily absorbed

market

market watch

Chip maker drags shares DJIA,
-0.50%

SPX,
-0.72%
South, Nasdaq COMP, and
-1.25%
lose before Bonds TMUBMUSD02Y,
3.515%

TMUBMUSD10Y,
3.268%
Sold out again, oil CL.1,
-1.90%
And gold GC00,
-1.30%
Down, Dollar DXY,
+0.94%
climbing. Bitcoin BTCUSD,
-1.30%
Just under $20,000.

When: Crypto.com Sues Woman Who Accidentally Deposited $10.5 Million Into Bank Account

Buzz

Tesla TSLA,
-1.04%
Unstable demand from Chinese EV makers like Li Auto LI
-3.51%.
Meanwhile, COVID-19 lockdowns have hit the 21 million residents of Chengdu, China’s tech and automotive hub.

Novo Nordisk NOVO.B,
-1.24%
Acquired Forma Therapeutics FMTX,
+48.54%
$1.1 billion worth of cash transactions.

Chipmaker Nvidia NVDA,
-8.37%
is depressed by news that the United States is pressuring the company to curb its data center business in China. Broadcom AVGO,
-2.59%
I will report after closing.

Elsewhere, MongoDB MDB,
-21.12%
Dark predictions and Okta OKTA,
-31.04%
I’m depressed due to troubles after the acquisition and employee turnover.

Weekly unemployment claims fell to their lowest level since late June. Labor productivity in the second quarter has been revised down to -4.1% from an initial estimate of a 4.6% decline. The 10am Institute for Supply Management manufacturing index and construction spending are still ahead. Atlanta Fed President Rafael Bostic will speak later.

read: ‘Worst semiconductor recession in a decade’ warns Citi analyst

Rabil Maganov, chairman of Russian oil giant Lukoil and Ukrainian war critic, has reportedly died after falling out of a hospital window.

A heatwave on the West Coast has prompted California officials to declare a power grid emergency, with fires closing major highways in the south.

best web

This $3 Component Helps Build New Homes in the U.S.

High energy prices put children’s lives at risk in Britain this winter, experts say

chart

Earlier this week we returned to BTIG Chief Market Strategist Jonathan Clinksey’s S&P 500 chart.

“Futures fell to 3,924 overnight (until 9pm ET). Our sense is our
In the short term, we’re getting closer to a recovery, but a failure to hold above 3,900 in an oversold situation would indicate that the June low was in jeopardy.”

BTIG

A bonus chart from blogger The Market Ear pointing out that the S&P 500 has been below the 200-day moving average for some time, and that it finally happened.

market ear

ticker

Below are the most searched tickers on MarketWatch as of 6am ET.

ticker

Security name

Bibi,
-7.66%

Bed Bath & Beyond

TSLA,
-1.04%

Tesla

GME,
-4.75%

game stop

AMC,
-5.28%

AMC Entertainment

NVDA,
-8.37%

NVIDIA

monkey,
-3.37%

AMC Entertainment Preferred Stock

AAPL,
-0.07%

apple

Nio,
-7.31%

Nio

ATXG,
-69.23%

appendix

AMZN,
-0.56%

Amazon.co.jp

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