‘Embarrassed’ bears will be forced into stocks: Pro
Danielle Hughes of Divine Capital is keeping it simple when it comes to stocks. Yes, September is historically the weakest month of the year. The second weakest month of the year is August and that certainly didn’t do the bears any good last month during a more than 3% rally. The stock market can bend but it hasn’t broken in 5 years. Those betting on history telling them when to time their trades need a better strategy.
“All bets are off the table in terms of cyclicality,” Hughes tells me in the attached video. “You’ve got this incredible Fed providing a mattress for years and years. Combined with what happened in the ECB last week and the (terrible) jobs number are going to keep the Fed more dovish, meaning the Fed is going keep rates as they are for a longer amount of team meaning the party in the stock market is going to continue.”
Hughes understands the objections. Everyone understands. This is a very, very tired market rally. Over bought, over talked and over blown. The best strategy has been buying stocks and forgetting about them. Professionals have to be invested and that means individuals will be with them. It’s about supply and demand.
She likes dividend-paying stocks and staying within basic stock and bond allocations. Within that strategy she wants to buy dips, stepping in ahead of the bears who have been sitting on the sidelines waiting for the next shoe to drop for five years. “They’re embarrassed,” she says of bears. “Look at where the market has gone in the last year or year and a half. It’s about time for them to start thinking about retirement because they’ve just had five years of returns taken away.”
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