Time will tell whether Institutional Investor’s Julie Segal was prophetic or just susceptible to well-know behavioral finance tendencies in her article, The Equity Culture Loses Its Bloom, in which she gives a host of reasons why there is no hope for equities going forward. However, I think she has accurately captured the current fears of many investors.
As investment moves away from equities, speculation will likewise shift from stocks to other investments, including real estate, commodities and currencies. “The money supply won’t shrink, and those dollars will need a home,” says Bove. Alternatives will continue to attract money from investors’ erstwhile equity allocations.
Surely, the mindset explained in the article goes a long ways toward explaining why there has been so much demand for our Global Macro strategy this year, which can invest in U.S. equities (long & inverse), international equities (long & inverse), currencies, commodities, real estate, and fixed income. Global Macro is available as a separate account and through the Arrow DWA Tactical Fund (DWTFX). The Global Macro portfolio comes along with a systematic method for determining when and how much exposure to take in various asset classes as conditions change.
Click here to visit ArrowFunds.com for a prospectus & disclosures. Click here for disclosures from Dorsey Wright Money Management.
