This Week in the Market

With Scott McCaghren and Tony LaPorta

Equity markets have traded somewhat as we anticipated in late April.  Domestic indices have traded lower and we believe there is even more downside potential. The new additions to the portfolios have traded nicely against the overall market conditions. 

 

Obviously, the biggest value-add to the current structure is our volatility hedge. This has performed quite nicely and we continue to look for further upside with the hedge. The purpose is, of course, to mitigate the downside of our current equity exposure. 

 

The second benefit that this provides is the opportunity to unload the hedge in order to re-deploy that capital for some discount equity shopping. We believe that this will position us quite nicely for the balance of the year with a tremendous edge on the overall market. Our target is both time and price: late June and S&P 500 at 2,650. 

 

There are many reasons from both technical and fundamental standpoint that would support our overall objective. As this commentary is being written, the major indices are trading in negative territory after opening up the session with significant gains. This furthers our perspective on lower indices and higher hedge prices. 

 

As always, we continue to monitor all equity, treasury, commodity and currency conditions in order to efficiently deploy capital as well as protect invested assets. 

 

Click the link to listen to Scott and Tony discuss this week's market

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