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Jul 19

Rising cash levels indicative of already very, very weak sentiment

  • July 19, 2022
  • CWM Investment Team
  • Richard Barrett

Volatility fatigue led to extreme weak investor sentiment which has now finally translated in defensive portfolio positioning. Actions speak louder than words. Fund managers surveyed have now taken up their cash balances to extremely high levels. Phenomenal counter indicator. Historical forward returns from high levels of cash are well-above average.

JUL 2000Adelphia Communications fraud had already occurred
MAR 2001WorldComm accounting fraud already happened
MAR 2003At the absolute bottom of the stock market sell-off and the start of the HY bond market recovery
DEC 2008Post Lehman bankruptcy and Great Financial crisis
JUN 2012Panic after Eurozone debt crisis
OCT 2016Pre presidential election positioning (market ripped higher after election)
APR 2020After COVID happened
JUL 2022Inflation and a slow-moving Fed already underway

Friends – everyone should view significant cash balances as an enormous bullish sign. Volatility fatigue has finally produced some selling and more cash. This is the most bullish thing I have seen in the markets in 6 months. Finally…..the best and brightest went to cash.

Richard Barrett
Chief Investment Officer


Congress Wealth Management LLC (“Congress”) is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). Registration does not imply a certain level of skill or training. For additional information, please visit our website at congresswealth.com or visit the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov by searching with Congress’ CRD #310873.

This note is provided for informational purposes only. Congress believes this information to be accurate and reliable but does not warrant it as to completeness or accuracy. This note may include candid statements, opinions and/or forecasts, including those regarding investment strategies and economic and market conditions; however, there is no guarantee that such statements, opinions and/or forecasts will prove to be correct. All such expressions of opinions or forecasts are subject to change without notice. Any projections, targets or estimates are forward looking statements and are based on Congress’ research, analysis, and assumption. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. This note is not a complete analysis of all material facts respecting any issuer, industry or security or of your investment objectives, parameters, needs or financial situation, and therefore is not a sufficient basis alone on which to base an investment decision. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this note. No portion of this note is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Investing entails the risk of loss of principal.

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    © Congress Wealth Advisor Solutions
    Congress Wealth Advisor Solutions (CWAS) is a division of Congress Wealth Management, LLC (CWM), which is a registered investment advisor with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. For additional information, please visit the Investment Adviser Public Disclosure website by searching with CWM's CRD #310873. Investment Advisory services are offered and rendered through CWM. CWM acquired Pinnacle Advisory Group, Inc. (Pinnacle) on April 30, 2021.