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  • Fund Managers Turning To Cash As Geopolitics And Interest Rate Rise Fears Bite 0 comments
    Aug 19, 2014 9:22 AM | about stocks: INVU

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    Rising geo-political temperatures combined with the threat of rising U.S. interest rates have led global investors to scale back risk and take cash levels to two-year highs, according to the BofA Merrill Lynch Fund Manager Survey for August.

    Investors have shifted robustly into cash with a net 27 percent of respondents to the global survey overweight cash in August, up from a net 12 percent in July. Cash now accounts for an average of 5.1 percent of global portfolios, up from 4.5 percent a month ago. Both cash readings are at their highest since June 2012. The proportion of asset allocators overweight equities has tumbled by 17 percentage points in one month, to a net 44 percent in August. The number of survey respondents hedging against a sharp fall in equity markets in the coming three months has reached its highest level since October 2008.

    Global growth predictions have fallen since July but remain firm. A net 56 percent of the global panel expects the economy to strengthen in the year ahead, a fall from a net 69 percent in the previous month. However, sentiment towards Europe has fallen significantly - the earnings outlook for the region suffered its greatest monthly fall since the survey started.

    Fears of a geopolitical crisis is the biggest cause of risk-reduction - with 45 percent of respondents naming it their number one "tail risk" this month, up from 28 percent a month ago. But a new question in the survey highlights how a rate hike is also playing on investors' minds - 65 percent of the panel expects a U.S. rate rise before the end of the first half of 2015.

    "The market melt-up is over, or at least on pause, as investors seek refuge while they digest world events and the prospect of higher rates," said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Research. "We see further de-risking to come in Europe. Negativity in this month's survey towards Europe reflects growing softness in economic data from both the core and periphery of the region," said Manish Kabra, European equity and quantitative strategist.

    Dr. Joseph Louro, Chief Executive Officer of Red Bank, New Jersey-based investment education company InvestView (OTCQB: INVU) commented that the geopolitical events in Ukraine and the Middle East are changing the investment landscape and added that investment education is important to better understand market trends and make money from investment opportunities.

    Dr. Louro said in the company web site, "It is our opinion that now, more than ever before, it is critical that the individual investor come to understand the forces that influence the marketplace. We specialize in assisting common investors through this process by offering them the tools, training and confidence that is required to successfully navigate the market in these trying times."

    Europe's status as the world's market darling for much of 2014 has all but evaporated in the past month, with a big negative swing in the number of investors currently overweight European equities and an even greater negative swing in sentiment about the future.

    A net 13 percent of asset allocators are overweight Eurozone equities - a fall of 22 percentage points in one month. U.S. equities also lost ground but only a 4- percentage point drop to a net 6 percent. Furthermore, a net 30 percent of global investors believe that the 12-month profit outlook is worse is Europe than in any other region. That reading has fallen 24 percentage points since July - a record one-month swing.

    It's not surprising therefore that Europe has now become more of a region to underweight than overweight. A net 4 percent of investors want to underweight Europe more than any other region. In July, a net 10 percent wanted to overweight Europe. The survey also highlights growing pressure on the euro. A net 40 percent saying that it is the currency they most expect to depreciate (on a trade-weighted basis), a reading that represents a two-year high in negativity towards the euro, up from a net 28 percent in July.

    Investview, Inc. provides and delivers a comprehensive online program of investor education: proprietary investor search tools and trading indicators, weekly newsletters as well as access to live weekly Trading Rooms. It delivers subscription-based financial education courses through InvestView's website. InvestView also allows new retail investors to use the portal's subscribed information on a 2-week trial period for $9.95.

    The company does it through its online education, analysis and application platform that provides analysis, tools, education solutions and an application. InvestView's web-based tools were designed to simplify stock research and improve the investor's research efficiency. One such tool is the Market Point, which is made up of five sections, namely: Charts, Stock Watch, Market, Calendar and Campus.

    InvestView offers five training courses that provide an incredible education in the stock market. The five InvestView courses build upon each other. Beginners should take them in the suggested sequence, while more seasoned traders may jump right into the more advanced topics that they are craving to better understand and give them the edge as a successful trader. Each course is offered via live webinar and as a recorded on-demand videos that is immediately posted at the end of each webinar. For more information, please visit their web site.

    Stocks: INVU
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