Loading ...he other day on CNBC, Andy Sieg, head of Merrill Lynch Wealth Management, admitted that his personal allocation to stocks was over 80%. Not to be outdone, CNBC anchor Becky Quick countered with a “I’m 100% in equities. … You’re never going to make enough money if you have 40% of your money in bonds.“
I am not trying to pick on Becky. She claims to have been 100% equities for quite some time. Maybe she has. If so, good for her as US stocks have been on quite the tear.
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However, I would like to point out that Becky was not bragging about this allocation at any time during the past decade. No, she has chosen December 2019 with the S&P 500 up more than 360% since the bottom to let us know about her over-allocation.
Herein lies my point. Just like this summer when bonds had already ripped 13 handles higher, market participants usually express this sort of arrogance at points when they feel confident. Extremely confident.
What do I take from this? It’s not the time to be reaching for exposure. I don’t need to know anything else except that CNBC anchors are competing with their guests about the size of their stock allocations.
Could we go higher? For sure. A good trader knows to never say never.
Is that the right bet? I don’t think so.
We all know that famous line from that rich-old-grandpa:
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I’ll leave it to you to decide if others seem greedy or fearful…
Kevin Muir
the MacroTourist