Tactically Bearish As Risks Increase

2025-01-16 14:10:00 ET

Summary

• It is critical to note that being “tactically bearish” does not mean we are expecting a bear market or a severe market crash.
• In most bear markets, the market showed plenty of warning signs well before the “bear” came out of hibernation.
• Currently, Wall Street analysts are very optimistic about 2025. Notably, earnings estimates for 2025 remain well deviated from historical long-term growth trends.

In last week’s discussion with Thoughtful Money, I noted that we are becoming more “tactically bearish” as we progress into 2025. While we have remained primarily bullish in equity positioning over the last two years, several risks are now worth considering....

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