The end of this current bull market cycle will be marked by “significant damage,” said Ted Oakley, founder and partner of Oxbow Advisors, who have currently allocated 35% of their investments into cash.
Oakley told David Lin that one of main factors behind the stock market rally in the last 10 years has been quantitative easing from the Federal Reserve, so any tightening from the central bank will likely trigger a market correction.
“If you look at the last 10 years, it’s all had to do with the Federal Reserve,” Oakley said. “It’s been unfortunate but they took away what should have been these ups and downs in the economy, they should have taken poor companies out of the economy, but the Federal Reserve has taken upon itself, which by the way is unfortunate – it’ll probably be one of the worst things we look back on – but they spent 10 years of keeping the money flow on and in the last two or three, they’ve really done it in a big way.”
0:00 – Stock market outlook
2:56 – Cash allocation
4:12 – Gold
7:05 – Biggest risks for equity markets
8:32 – Triggers for a correction
10:50 – Quantitative easing
12:37 – Wages, inflation, deflation
15:05 – Portfolio allocation
17:49 – Stock picks
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