Sometimes the market takes the long way around.
Despite rallies, sell-offs, spooks, and reliefs, the S&P has gone nowhere in 2 full years.
That’s right. Had you taken that sabbatical you dreamed of two years ago and just now took the time to open your brokerage statement, you might think you didn’t miss anything.
But there’s another roundtrip that I find way more interesting.
According to a chart by Goldman Sachs, hedge funds are significantly underexposed to equities at the moment.
In fact, hedge fund net exposure to equities (which means subtracting short exposure from long exposure) is as low as it’s been in three years.
And that neutrality gives them plenty of scope to pile into equities once a rally gets underway.
As I’ve mentioned, I’m expecting a rally in stocks to get underway soon.
And this hedge fund dry powder definitely has the potential to turn a bullish move into a massive summer rally.
So get stocks now and let hedge funds give you a free and profitable lift.
Have a great week!