Investors may want to take a step back as stock prices fluctuate amid rising geopolitical tensions.
DBi’s Andrew Beer points out that the market’s crystal ball has shattered.
“It’s not normal for major markets to change as much as they are currently,” the firm’s managing member told CNBC’s “ETF Edge” this week. “There is something deeply wrong with the market’s ability to predict the state of the world…The only thing we can all do as investors is: This is the moment to plan and prepare for the worst. Hope for the best.”
Beer, who has worked in the hedge fund industry for more than three decades, finds it remarkable that the many stresses the financial system has experienced over the past 12 to 18 months have not caused things to spiral out of control.
“Today, even more geopolitical risks are piling up [and] “There are more economic risk factors than I can ever remember in my career,” he added.
Beer urges investors to ask themselves how they would react if another market downturn occurred in 2008 or 2022.
“These financial assets are an investment, but they are also what you need to survive, to live and to retire, and so it is the very real human side of it that I hope people will focus on,” he added.
According to Beer, an investment like the one in 2025 could become a regret.
“The best thing you can do in 2025 is just turn off your computer at the beginning of the year and come back at the end of the year and you’ve made money, your stocks, your bonds and everything else,” he said. “It won’t continue like this. We will go through a more difficult time.”
Last move-ins Gold, Silver, Bitcoin And Crude oil This underscores how difficult it has become for investors to calibrate portfolios, especially as sharp reversals occur over short periods of time, Beer said.
“Nobody has a rulebook for this,” said Beer, who is also watching for signs of tension in private loans, insurance company portfolios and other areas of the market where unusual tensions could spread.
Nate Geraci of NovaDius Wealth Management highlighted exchange-traded funds designed to provide portfolio protection – particularly managed futures ETFs.
“This is absolutely a longer-term allocation, and I look at it almost as portfolio insurance,” the company’s president said in the same interview. “They want that insurance if something goes wrong in the market, and maybe that’s because stocks and bonds are going down at the same time.”
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