Everyone has an opinion on whether or not the FED will increase interest rates. Futures are saying YES and I don’t think the FED can be any more clear here. Strong case for June rates liftoff, says Fed’s Lacker
“Given what we know today, a strong case can be made that the federal funds rate should be higher than it is now,” Lacker said in prepared remarks to the Greater Richmond Chamber of Commerce. “I expect that, unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting.”
Which leads us to a pretty good advice from Saxo Bank’s chief economist. Sell Your Stocks and Take Six Months Off
“If nothing else, reduce your stock portfolio to where it was on the first of January last year, put the money into cash and take a nice long summer holiday,” said Jakobsen, 50, also chief investment officer at the Danish lender. “You won’t make any money, but you lose all the downside risk.”
I would tend to agree with the sentiment above. Imagine going into cash at 2000 and 2007 tops and that is precisely what Mr. Jakobsen is telling you to do now. Although I would make one slight adjustment. This will take a heck of a lot longer than six months to play out. Consider staying out for at least 2 years.
