Tags: Hoenig | bull | market | correction

Capitalistpig's Hoenig: 'Bull Market Is Intact'

By    |   Friday, 16 May 2014 09:51 AM

Stocks may have stumbled Wednesday and Thursday, but that doesn't mean investors should bail out of the market, says Jonathan Hoenig, founder of Capitalistpig hedge fund.

That's especially true given that the S&P 500 and Dow Jones Industrial Average just hit record highs Tuesday, he tells Yahoo. Both indexes closed within 2 percent of their all-time peaks Thursday.

"This bull market is intact," Hoenig insists. "I do think it is transitioning,” from growth stocks to value stocks.

Editor’s Note:
5 Shocking Reasons the Dow Will Hit 60,000

The market is due for a correction, he notes. "It's been years since we've had a meaningful 10 to 15 percent correction. But you don't want to fight the tape, and . . . the tape points upward." The S&P 500 hasn't endured a 10 percent drop since October 2011.

"I don't think investors should abandon their stock positions," Hoenig argues. What they should do is "use staggered stop-loss orders below the current market price."

"So if the markets do correct significantly, you can get out with some of your profits. But if the bull market continues, you can continue to exploit those gains as well.”

Many investors have turned wary of the market. "The primary sentiment right now is cautious and nervous," Michael James, managing director of equity trading at Wedbush Securities, tells Bloomberg.

"It's more a matter of capital preservation than it is trying to generate returns. This is a time of caution. More people are looking to make sales and raise cash than they are to put cash to work on the weakness."

Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000

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Stocks may have stumbled Wednesday and Thursday, but that doesn't mean investors should bail out of the market, says Jonathan Hoenig, founder of Capitalistpig hedge fund.
Hoenig, bull, market, correction
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2014-51-16
Friday, 16 May 2014 09:51 AM
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