Market Alert: Why Low Cash Levels Could Signal Turbulent Times Ahead

Bull markets require fuel to sustain themselves, and that fuel is cash that can be committed to further purchases. Alarmingly, current fund manager cash levels (which account for the majority of stock market buying) sit at the lowest level in many years at 3.5%(which is essentially a fully invested condition).

Failing a dramatic rush of major new capital into institutional coffers, fund managers will be forced to sell existing positions to buy new positions. Historically not a recipe for market advances.

The combination of U.S. stock markets at all-time valuation highs, low institutional cash levels and a looming global trade war suggests to us that the current risk/reward level for equities is less than compelling.

For these reasons and other economic and geopolitical factors, we foresee that market volatility will be a defining characteristic of global markets for the balance of the decade. The turbulent times ahead will present substantial risks for complacent investors, yet simultaneously unveil remarkable opportunities for discerning, proactive investors dedicated to robust risk management and seizing attractive risk/reward profit opportunities across diverse markets and asset classes.

We invite you to explore our in-depth analysis of unfolding events and investment activities through our esteemed monthly publication, the Global Investment Letter, which provides actionable investment ideas and timely updates on major stock, bond, currency, and commodity markets.

If you found this analysis insightful, we encourage you to sign up for our exclusive free weekly investment commentary. You will also gain access to complimentary sample issues of the Global Investment Letter by visiting our website and clicking on ‘sample issues.”

Join our growing community here: https://www.globalinvestmentletter.com