A: We had been saying for months that the market structure was looking weak. We noted on several occasions that the market was failing to make new all-time highs, instead making a series of lower highs which is bearish.
A: For months we have been building and holding a higher cash position than usual. Depending on the client, cash can be anywhere between 10% - 30%.
Other parts of your portfolio also helped namely Private Real Estate and Private Credit which were essentially stable and/or gained in value depending on the particular security.
In other words Brexit may be the beginning of an unraveling of the European Union - the start of a trend rather than the end. Of course we don’t know for sure.
We can’t quantify this risk but it certainly is not Zero. Hence uncertainty is likely to prevail for some time and that will create market volatility.
From our reading, most market notes will deal with the impact of trade flows so we won’t rehash that except to say Brexit will likely be short-term negative and long-term positive for both the UK and the USA in terms of trade flows.
The more immediate impact is likely to be on the ‘imminent’ US elections. If we extrapolate the English voter’s frustrations back home, then who is the candidate best suited to address the concerns of the masses?
The polls would suggest Donald Trump is losing ground to Hillary round about now. To which we will say: The Polls are Wrong!
As for what will trigger the next sell-off, our answer is the same as before, we have no idea but the market trend is down and the trend is your friend!
Thank you for reading my post. I regularly write about private market opportunities and trends. If you would like to read my regular posts feel free to also connect on LinkedIn, Twitter or via Atlanta Capital Group Investment Management.
Greg Silberman is the Chief Investment Officer of Atlanta Capital Group Investment Management [ACGIM]. Atlanta Capital Group Investment Management specializes in creating custom private market solutions for RIA/Family Office clients.
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