Ambiguously in CASH

The volatility for 2015 continues to be high.  On May 6, Investor’s Business Daily changed the market outlook to “market in correction”.  Two days later the S&P500 gapped up above its 50 day moving average, coming within 0.3% of an all-time high.  Despite the jump, the market remains in “correction”.  Year-to-date it’s only been in “uptrend” status for 52 calendar days (40% of the time).

Things are just as uncertain in the bond market.  In a little less than one month, the US 10 year Treasury yield has risen nearly 23% (yielding 2.28% today).  Had you been invested in a “safe” bond fund like the TLT (US 20 year Treasury fund), you’d have lost over 8.5% in the past three months.

Markets are always uncertain, but converging events tilt towards ambiguity- timing of a Federal Reserve rate increase, slowing of corporate profits, cooling of China’s growth at less than 7% despite massive government intervention, and Germany emerging as Europe’s only bright spot.

What’s an investor to do?  Personally I remain primarily in cash.

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