Navigating Precarious Markets: Hedge, Don't Bet
The current global financial landscape presents a confluence of unprecedented market valuations, particularly within senior US stock indices, alongside burgeoning economic uncertainties. Since April, these indices have exhibited a relentless upward trajectory, punctuated by only minor retractions. This sustained ascent has propelled them into significantly overbought territory, reaching historical valuation peaks. Concurrently, the Russell2000 Small-Cap Index is confronting critical long-term resistance levels, signaling a potential inflection point. These market dynamics unfold against a backdrop of a visibly decelerating global economy. Factors such as escalating tariffs, pervasive regime uncertainty, and the cumulative effects of years of malinvestment are exerting considerable pressure. Such conditions typically portend either a deceleration in corporate earnings growth or, more critically, a contraction if the long-anticipated recession finally materializes. Consequently, the prev…
