Many market economists are now saying the next shoe to drop will be commercial real estate. The Merrill Lynch chief economist is forecasting a 1% fed funds rate by year end combined with increased inflation. That implies stagflation going forward. The big question is how much and for how long will both real estate prices and the U.S. economy decline? I agree with some recent posts that we may see another week or two of positive market returns, but they will probably not be nearly as positive as last week and the longer term trend will be down. I am down about 2.7% overall being fully invested with about a 20% hedge in QID, but it is difficult to figure out and implement a strategy to get to positive for the year. Good luck to all.
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