Author: Richard Moore
Covestor model: Market Comparables
Disclosure: None
The investment indicators I use to gauge the risk present in the stock market remain in conflict. The market remains in an uptrend by any measure, but my sentiment indicators remain in extremely negative territory. This means that most small investors and speculators are fully invested and very optimistic. Since these investors are usually wrong, I want to be cautious about future stock market prospects.
In order to lower risk, I am maintaining a fully hedged position in my portfolio. I am utilizing screens to find what I hope are attractive investment situations that can do better than the stock market averages, both in advancing and declining markets.
Again in February the model managed to post a positive return, albeit a minimal one. Overall, over the past six months since I started a hedged approach, I am very happy with the performance results.
