What the Smartest Guys in the Room Think


I’ve never seen a market this disorganized. We seem to be stuck in a directionless market that’s just bouncing inside a channel between 17,600 and 18,200 over and over again.

Unfortunately, there really is very little to get excited about in the market.

Consumer spending, retail numbers, unemployment… you name it. It’s just not looking as good as we would have liked.

Now that the Fed – and the bulls – has forced markets to nosebleed heights, some of the biggest names on Wall Street are moving to cash.

In fact, former PIMCO boss Mohamed El-Erian is now mostly in cash.

"I am mostly concentrated in cash... because I think most asset prices have been pushed by central banks to very elevated levels,” as noted by Zero Hedge. “Central banks look at growth, at employment, at wages. They are too low.”

“They don’t have the instruments they need, but they feel obliged to do something; so they artificially lift asset prices... Because they hope that they will trigger what’s called the wealth effect, but there is a massive gap right now between asset prices and fundamentals."

While many investors can’t afford to simply be in cash, “it makes sense to reduce your exposure to the most trafficked assets,” he says.

But he’s not the only one fearful of near-term downside.

According to hedge fund manager Julian Robertson, “we can certainly see a 2008-like market crash because ‘the bigger this bubble gets, the bigger the burst.’”

“I don’t think it’s ridiculous to think a selloff like we saw in 2008.”

With some of the biggest names on Wall Street chiming in and moving to cash, it may be best to check with your financial advisor. Proper money management tools are a must in today’s market. It’s never safe to ignore your money, even if you think it’s safe.