Jeff Saut: "Dilution of Our Currency Causing Money to Flow Into Assets of All Kinds" ~ market folly

Monday, April 2, 2012

Jeff Saut: "Dilution of Our Currency Causing Money to Flow Into Assets of All Kinds"

Market strategist Jeff Saut's latest investment strategy piece is entitled 'Shrugging Off Bad News' and focuses on how stocks don't seem to care about negativity.

Saut has advocated being cautious as of late as he anticipates either a 5-8% pullback or sideways market action to work off the overbought condition. Given that the market hasn't declined, Saut outlines what to possibly expect in the second quarter (emphasis ours):

"Investors should be prepared for further policies designed to stimulate the economy, which should allow stocks to travel higher even if they do pause, or stumble, in the near-term on concerns the fundamentals are turning squirrelly.

Nevertheless, what many investors don't understand is that in the short/intermediate-term there is not a linear relationship between the fundamentals and the stock market's directionality.

Manifestly, it is the dilution of our currency, with a concurrent decline in its value due to a massive increase in the money supply, which is causing money to flow into assets of all kinds, including stocks. And that, ladies and gentlemen, is the natural reaction to the flood of liquidity injected into the system by the world's central banks. I don't think it will end anytime soon."

Embedded below is Jeff Saut's market commentary for this week:

You can download a .pdf here.

For more from the strategist, check out Saut's recommended portfolio positioning.

blog comments powered by Disqus