Jeff Saut: Cautious Heading Into New Year ~ market folly

Tuesday, December 29, 2009

Jeff Saut: Cautious Heading Into New Year

Jeff Saut, chief investment strategist of Raymond James is back with his weekly investment strategy. This week's commentary is entitled "The Telegraph Market." While Saut and his team have been bullish since the March lows and reversal (with a few scattered fits of caution), he has altered his stance as we head into the new year. In terms of other recent commentary from Saut, we also covered his 2010 market outlook as well as his prior market commentary.

Saut has turned cautious again "because the Treasury bond market is breaking down (read: higher interest rates) and the U.S. dollar is rallying." He notes that the dollar carry trade that had become popular as of late will be unwound if the dollar continues to head higher. His Raymond James team feels that it's best to "bank" some profits heading into the new year and to hedge your books.

At the same time, Saut feels we are still on the proverbial economic road to recovery. The problem is, how do you know how much company earnings upside has already been priced in due to the monstrous rally from March until present? Their call for now is to be cautious and to protect gains by locking in profits or hedging your books.

Embedded below is Jeff Saut's weekly investment strategy:

You can also download the .pdf here.

For more thoughts from Saut, check out his 2010 stock market outlook as well as his previous week's commentary.

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