Caution: Too Much Complacency

Victor Dergunov
Investing Group Leader
(8min)

Summary

  • Markets are showing surprising complacency despite heightened geopolitical risks, stretched valuations, and weakening economic data, increasing the probability of a near-term pullback.
  • Key divergences between volatility (VIX) and equity indices signal rising risk, while earnings face pressure from higher tariffs and slowing growth.
  • I've reduced exposure to higher-risk tech stocks, added hedges, and increased cash to capitalize on potential buying opportunities if a correction occurs.
  • Despite short-term caution, I remain bullish long-term, maintaining a year-end S&P 500 target of 6,500 and seeking quality equities on pullbacks.
  • This idea was discussed in more depth with members of my private investing community, The Financial Prophet. Learn More »

Business Man Looking at Shipping Containers Covered in Country flags – Symbolizing Trade Tariffs, Global Trade Challenges and Market Volatility

Angelica Zander

There's been a lot of "action" over the weekend, like the U.S.'s bunker-busting bombing of Iran's most precious nuclear sites. Honestly, I expected more of a reaction in essentially all markets. I imagined that gold and oil would be spiking, and

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This article was written by

Victor Dergunov
51.94K Followers

Hi, I’m Victor Dergunov, MBA, and I’ve been an active investor for over 20 years. My passion for investing started early, and I’ve spent two decades honing strategies that consistently deliver results. Whether it's tech giants like Apple and Tesla or opportunities in commodities and crypto, I provide diversified insights to help you succeed. Join me, and let’s take your investing to the next level.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of BTC-USD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am long a diversified portfolio with hedges.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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