With stocks surging, George Seay, Founder and Chairman of Annandale Capital urges caution for anyone making short-term moves.
Transcript:
CAROLINE WOODS: So George, you say investing in the current market is a very risky bet. Explain why.
GEORGE SEAY: Yeah, I’d say that from a short term trading perspective, maybe not so much from a long term investing perspective. If someone’s got a multi-year time horizon on their investments or they’re happy with their allocation to the stock market, I don’t think there’s any cause to be greatly concerned. The economy is still doing really well and earnings growth is very, very strong compared to the growth rate of the overall economy. GDP is supposed to go up just about 1.5% this year, which isn’t great growth, but profit growth is much better than that. I think I’m reacting to the fact that in the last 80 trading days for the market, we’ve had roughly a three sigma event. It’s – the market’s gone up 26% in a very short 80 trading days, and that’s a 0.3% observation over the last 100 years of the stock market. So only less than one half of 1% of the time have markets gone up that fast in that short period of time. And that highly. So I just think a little caution is in order in the next several months. And this is usually a soft time of year or two from mid-July through October. So I would have some caution and maybe take some chips off the table if you’re overexposed to the market at this point.
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