The Fed has gone ahead and raised rates again. As rates continue to rise, investors have to wonder which one of these raises will finally go past the tipping point for the market? With the ongoing EM crisis, other developed markets absolutely hated, and the US$ being loved and given a bullish rating on everyone, it is pretty interesting to note that the DXY has not cracked past 97 so far this year. There are some signs that the DXY top is already in for this cycle, but some other signs that indicate that it could go a bit higher — depends on which data points you look at. I remain weary and neutral on it while maintaining defensive positions.
Outlook for October 2018
Gold remains the ultimate hedge against central bank policy errors and I continue to take the other side of the popular trade. I will continue keeping a close eye on the Dollar Index and look for further opportunities.
Since I have a sizable position in the materials sector space, I do not intend to make any aggressive moves, but I may nibble a bit more if I see some screaming buys. — as I did in September with purchases of FNV and KL. If you are looking to build some long term/core positions in commodities space, this is a great time to initiate as the sector is absolutely hated and everyone is piling on one side of the trade.
I am happy sitting on my current positions and let the market play out. I am also looking closely at other real assets to weather the storm of the oncoming massive devaluation of fiat currencies. As of Sep-30-2018, our overall portfolio diversification is structured as shown below.
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What are your thoughts on the points mentioned above? Do you have any specific thoughts on the markets and looking at anything interesting? Share with a comment below.
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