Category Archives: asset allocation

El-Erian: Expect Major Volatility – and Big Opportunities

Mohamed El-Erian, says to expect major volatility in the coming months — volatility that will create some great opportunities.

“We have a bumpy road ahead of us, but I keep on stressing, it will create a lot of attractive opportunities,” he told CNBC. El-Erian said the global market may experiencing a shift to a “higher volatility regime,” meaning that asset allocations will become aggressive and price multiples will begin “looking high.” That’s when markets overshoot and act with too much correlation, creating the opportunity is, he says.

He also says that opportunities may well be occurring in emerging markets and oil, but he advises caution. “If you already have exposure, wait a little bit, there are going to be even more attractive positions—there are still people stuck in those markets looking to get out,” he said. “We’re going to look back on this, and this is going to be a very attractive stage. … It’s one of these things that happens once a decade… but be careful because it’s going to be incredibly volatile in the next few months.”

El-Erian also says investors would be wise to stop obsessing so much over potential interest rate hikes. He says the tightening cycle, if and when it occurs, will likely be the “loosest tightening in the history of the Fed”.

Doubleline’s Baha: Don’t Think Short Duration Bonds Are A Rate-Hike Panacea

Conventional wisdom seems to be that the best way to deal with looming interest rate hikes is by buying only short duration bonds, or dumping bonds altogether. But in a recent Forbes column, DoubleLine’s Bonnie Baha takes aim at those notions.

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El-Erian: “Classic Overshoot” In EMs Will Hurt Now, Create Opportunities Later

Mohamed El-Erian says we are seeing a “classic overshoot” to the downside in emerging markets right now, which should lead to more pain in the near term but opportunity over the longer term.

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Faber Says We’re In A “Stealth Bear”

While stocks are up slightly this year, Marc Faber of the Gloom, Boom & Doom Report says that a “stealth bear market” has been going on under the surface.

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Paulsen: Watch For Commodities To Surprise — If This Happens

Wells Capital’s James Paulsen says a commodities rebound will depend on what the dollar does, and he thinks the dollar has been in “peaking mode” since March.

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Romick Sees Some Value In Big Tech, Russia, and Little Else

Top value fund manager Stephen Romick continues to be wary of the current stock market environment, and has a big chunk of his portfolio in cash.

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Rogers: Wait To Buy Oil

While oil has again been plunging, commodities guru Jim Rogers says he wouldn’t start buying oil – yet.

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