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Party Like It's 1999 (and 1929) By John P. Hussman, Ph.D.



* September 12, 2016

My view is that investors should presently make room in their portfolios for safe, low-duration assets, hedged equities, and alternative strategies that have a modest or even negative correlation with conventional securities. I expect that there will be substantial opportunities to alter that mix over the completion of the current market cycle. The time to focus on higher beta and longer duration assets is when those assets are priced at levels that offer potential compensation for their prospective risk. Currently, investors in conventional assets face a combination of weak expected returns and spectacular downside potential. I expect that this will soon enough be as obvious as it was in 2002 and 2009, when investors looked back on their insistence that “This time is different” and replaced that thought with “What the hell were we thinking?

http://hussmanfunds.com/wmc/wmc160912.htm

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