{"id":139500,"date":"2021-09-22T16:29:01","date_gmt":"2021-09-22T16:29:01","guid":{"rendered":"https:\/\/precoinnews.com\/?p=139500"},"modified":"2021-09-22T16:29:01","modified_gmt":"2021-09-22T16:29:01","slug":"take-those-profits-strategist-says-extreme-market-moves-are-the-horizon","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/take-those-profits-strategist-says-extreme-market-moves-are-the-horizon\/","title":{"rendered":"&#x27;Take those profits&#x27;: Strategist says extreme market moves are the horizon"},"content":{"rendered":"<ul>\n<li>Paul Gambles, co-founder of investment advisory firm MBMG Group, says investors should consider significantly building up their cash positions.<\/li>\n<li>His comments come as market participants remain cautious given a flurry of risks on the horizon.<\/li>\n<li>Ray Dalio, founder of the world&#x27;s largest hedge fund, Bridgewater Associates, told CNBC&#x27;s &quot;Squawk Box&quot; earlier this week that investors should not deal with market risk by hiding out in cash. <\/li>\n<\/ul>\n<p>Financial markets appear vulnerable to what could be an extreme move in either direction, according to Paul Gambles, co-founder of investment advisory firm MBMG Group.<\/p>\n<p>As a result, Gambles said investors should consider sitting on the sidelines and build up their cash positions significantly.<\/p>\n<p>His comments come as market participants remain cautious given a flurry of risks on the horizon. These include fears of rising inflation, persistent concerns about the economic outlook amid the ongoing coronavirus pandemic, supply shortages and valuation concerns. <\/p>\n<p>Some investors are also wary of the possible implications of China&#x27;s indebted property firm Evergrande, which is on the brink of default. <\/p>\n<p>&quot;Our advice is just be a little bit cautious. We think that the market is very finely poised waiting for what potentially could be a very, very big move,&quot; Gambles told CNBC&#x27;s &quot;Squawk Box Europe&quot; on Friday.<\/p>\n<p>&quot;We&#x27;ve got no idea which direction that could be; I realize that doesn&#x27;t sound helpful, but frankly there are just so many unanswered questions out there right now,&quot; he continued. &quot;Until we start to get answers to those, our advice is actually unless you can really afford to take what could be a pretty big hit, and possibly even a permanent hit, then it is better to just sit on the sidelines.&quot;<\/p>\n<h2>&#x27;It&#x27;s a coin flip&#x27;<\/h2>\n<p>Gambles said MBMG Group, which says it has over $1.5 billion assets under advice, has looked to raise cash levels &quot;quite dramatically&quot; of late, warning market risk had &quot;suddenly gone up and off the scale&quot; compared to just one month ago. <\/p>\n<p>Gold and gold miners were &quot;one of the best ways to hedge risk&quot; for the moment, he added, suggesting there was also still some value in Treasuries. <\/p>\n<p>&quot;Take those profits,&quot; Gambles said. &quot;You should be able to swallow your fear of missing out rather than expose yourself to the risk of what could be some pretty significant losses if we get a reversal.&quot;<\/p>\n<p>&quot;We are not saying that there is an absolute crash nailed on here, far from it. What we are saying is it&#x27;s a coin flip as to whether things are good or things are bad and, you know what, it has got the potential to be pretty extreme in either direction,&quot; Gambles said.<\/p>\n<p>He said it was the first time he&#x27;d advised clients to hold cash for some time.<\/p>\n<p>&quot;This is a potentially pivotal moment and we&#x27;ve got no idea whether it is going to be a good or bad outcome,&quot; Gambles added.<\/p>\n<h2>&#x27;Cash is trash&#x27;<\/h2>\n<p>Not everyone is in favor of building cash positions. <\/p>\n<p>Ray Dalio, founder of the world&#x27;s largest hedge fund, Bridgewater Associates, told CNBC&#x27;s &quot;Squawk Box&quot; earlier this week that investors should not deal with market risk by hiding out in cash. <\/p>\n<p>&quot;Don&#x27;t keep it in cash,&quot; Dalio said from the SALT conference in New York City. More than a year after saying &quot;cash is trash,&quot; Dalio said on Wednesday that he still feels that way. <\/p>\n<p>Instead, the hedge fund billionaire said the most important thing for an individual investor was to know &quot;how to diversify well.&quot; <\/p>\n<p>Dalio argued that doing so across countries, currencies and asset classes would outperform cash.<\/p>\n<h2>Correction concerns<\/h2>\n<p>Daniel Lacalle, chief economist at Tressis Gestion, told CNBC on Friday that he expected financial markets to turn lower in October, saying a constellation of factors could force investors to come &quot;back to reality.&quot;<\/p>\n<p>&quot;I believe that what we are likely to see is first the backlash from very aggressive expectations and very optimistic expectations about the recovery,&quot; Lacalle said, noting the recovery pace remains for now.<\/p>\n<p>Lacalle said market estimates that were far too bullish had become &quot;embedded&quot; in earnings and macro growth projections. In addition, tapering from the U.S. Federal Reserve and European Central Bank, as well as concerns about a slowdown in China, were likely to trigger a market correction.<\/p>\n<p>The risk of a &quot;very aggressive&quot; correction or a spillover effect to the sovereign debt market was somewhat limited, Lacalle said, given that the Fed and the ECB were expected to continue to be supportive.<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/09\/17\/build-cash-positions-ahead-of-extreme-market-moves-strategist-says.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Paul Gambles, co-founder of investment advisory firm<\/p>\n","protected":false},"author":3,"featured_media":139499,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23054],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>&#x27;Take those profits&#x27;: Strategist says extreme market moves are the horizon - 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