{"id":19505,"date":"2022-03-11T07:30:07","date_gmt":"2022-03-11T12:30:07","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19505"},"modified":"2022-03-11T07:30:07","modified_gmt":"2022-03-11T12:30:07","slug":"the-hedge-funds-are-doing-it-why-shouldnt-you","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-hedge-funds-are-doing-it-why-shouldnt-you\/","title":{"rendered":"The Hedge Funds Are Doing It, Why Shouldn\u2019t You?"},"content":{"rendered":"<p>Trends break, storylines fade, and trusting investors are always left holding the bag.<\/p>\n<p>That\u2019s what we\u2019re seeing now with a weak market and high inflation.<\/p>\n<p>Hitching your wagons to the powers that be &ndash; like the folks pulling the strings in Washington &ndash; is just not a good idea.<\/p>\n<p>For example, their bright idea to get more oil to lower gas prices is to <em>beg<\/em> Iran (a Russian\/Chinese puppet) and Saudi Arabia (who aren&rsquo;t taking Biden&rsquo;s calls).<\/p>\n<p>Considering the situation in Europe, the irony is on full display&hellip;<\/p>\n<p>I say this to remind you that the ultimate responsibility of investors&rsquo; portfolios should be their own.<\/p>\n<p>So how should investors take matters into their own hands?<\/p>\n<p>The same way the hedge fund industry is doing it.<\/p>\n<p>Take a look at this chart&hellip;<\/p>\n<div class=\"text-center mb-4\"><img decoding=\"async\" src=\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202203\/20220311-jmu-01_frt281.png\" alt=\"Chart\" class=\"img-fluid\" \/><\/div>\n<p>Hedge funds have been pouring money into multi-strategy funds and out of the rest of the industry.<\/p>\n<p>That&rsquo;s because multi-strategy funds can take advantage of opportunities across asset types&hellip; <em>and<\/em> time horizons. This dual ability is what will separate profitability from mediocrity over the next few years.<\/p>\n<p>They&rsquo;ve been ahead of the curve in realizing that the time of nearsighted investment strategies is over, and it&rsquo;s ushering in an era of macro-focused trading.<\/p>\n<p>These strategies shine when trends break, new ones are formed, and the ability to ride those new trends across asset classes will be where the returns are at for the foreseeable future.<\/p>\n<p>And of course, knowing how to handle <a href=\"https:\/\/www.jeffclarktrader.com\/glossary\/#volatility\" target=\"_blank\" rel=\"noopener noreferrer\">volatility<\/a> will be important too. That means understanding money flows, <a href=\"https:\/\/www.jeffclarktrader.com\/glossary\/#technicalanalysis\" target=\"_blank\" rel=\"noopener noreferrer\">technical analysis<\/a>, and fundamentals all at the same time.<\/p>\n<p>That may sound complicated for the &ldquo;do it yourself&rdquo; investor, but it&rsquo;s not.<\/p>\n<p>The first order of business should be to hitch your wagon to a few <em>non-mainstream<\/em> trading experts.<\/p>\n<p>That&rsquo;s because mainstream sources are always late to the party and wait until a trend unfolds to recommend it.<\/p>\n<p>For example, mainstream giant Goldman Sachs recently recommended gold and stated, &ldquo;Given the material upward revision in investment and demand assumptions, we now upgrade our gold target to $2,500.&rdquo;<\/p>\n<p>That&rsquo;s mainstream speak for &ldquo;prices have gone up.&rdquo;<\/p>\n<p>On<a href=\"https:\/\/www.jeffclarktrader.com\/market-minute\/an-ongoing-problem-for-the-fed\/\" target=\"_blank\" rel=\"noopener noreferrer\"> February 1<\/a>, I mentioned how Goldman Sachs predicted that gold would be around $2,050 but I called for closer to $2,400. Now, they&rsquo;ve upped it to $2,500&hellip; like I said, late to the party.<\/p>\n<p>So, the $2,400\/oz gold price target I made on <a href=\"https:\/\/www.jeffclarktrader.com\/market-minute\/atop-the-ivory-tower-gold-bulls-look-uncivilized\/\" target=\"_blank\" rel=\"noopener noreferrer\">February 18<\/a>, <a href=\"https:\/\/www.jeffclarktrader.com\/market-minute\/golds-third-attempt-at-this-might-actually-work\/\" target=\"_blank\" rel=\"noopener noreferrer\">August 20,<\/a> and <a href=\"https:\/\/www.jeffclarktrader.com\/market-minute\/yet-another-buying-opportunity-awaits-the-biggest-trade-of-the-year\/\" target=\"_blank\" rel=\"noopener noreferrer\">July 21 <\/a>doesn&rsquo;t seem as crazy now&hellip;<\/p>\n<p>A lot of traders don&rsquo;t believe in gold because there&rsquo;s this notion that it can&rsquo;t rise in a rising interest rate environment&hellip; but it can, and it will.<\/p>\n<table bgcolor=\"#eeeeee\" border=\"0\" cellpadding=\"10\" cellspacing=\"0\" width=\"100%\" style=\"border: 1px solid #D7D7D7; margin-bottom:20px;\">\n<tbody>\n<tr>\n<td style=\"padding-left: 15px;padding-right: 15px; padding-top: 15px; font-family: Arial,sans-serif;font-size:17px; line-height:24px;\">\n<p align=\"center\"><strong>Free Trading Resources<\/strong><\/p>\n<p>Have you checked out Jeff&#8217;s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just <a href=\"https:\/\/www.jeffclarktrader.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>On <a href=\"https:\/\/www.jeffclarktrader.com\/market-minute\/war-related-headlines-are-just-a-convenient-backdrop\/\" target=\"_blank\" rel=\"noopener noreferrer\">February 15<\/a>, I stated, &ldquo;Gold and rates have been moving up together this year and will continue to do so.&rdquo;<\/p>\n<p>But buying gold is not enough. It needs to be paired with a short bond  position.<\/p>\n<p>The best and easiest way to combine these positions is with <a href=\"https:\/\/www.jeffclarktrader.com\/glossary\/#etf\" target=\"_blank\" rel=\"noopener noreferrer\">exchange-traded fund (ETF)<\/a> proxies you may have already heard of &ndash; the SPDR Gold Trust (GLD) and iShares 20 Plus Year Treasury Bond ETF (TLT).<\/p>\n<p>Being long GLD gives you direct exposure to physical gold.<\/p>\n<p>But to bet on rising interest rates means betting <em>against<\/em> TLT and betting that bonds will fall.<\/p>\n<p>Since interest rates are derived from bond prices&hellip; when bonds fall, rates rise. Looking at either bonds or rates themselves gives you the same information.&nbsp;<\/p>\n<p>What we&rsquo;re seeing unfold right now might be one of the most epic shorts in recent memory.<\/p>\n<p>Treasury bonds have been in one of the biggest Fed-induced bubbles of all time.<\/p>\n<p>And this 30-year rate chart below is telling me this bubble is beginning to pop&hellip;<\/p>\n<div class=\"text-center mb-4\"><img decoding=\"async\" src=\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202203\/20220311-jmu-02_frt281.png\" alt=\"Chart\" class=\"img-fluid\" \/><\/div>\n<p>What you&rsquo;re seeing is a decades-long trend about to burst.<\/p>\n<p>If that happens, a good estimate for the 30-year rate is around 4.75%&#8230; which would mean TLT will likely trade at or below its all-time lows.<\/p>\n<p>But here&rsquo;s the real benefit of combining long gold exposure with a short on bonds in this environment&hellip;<\/p>\n<p>You&rsquo;re not only hedged if gold decides to drop if &ldquo;peace in our time&rdquo; is announced in Europe&hellip; You&rsquo;ll be at the forefront of a new trend in two traditionally opposing asset classes too.<\/p>\n<p>Regards,<\/p>\n<p>Eric Shamilov<br \/>Analyst, <em>Market Minute<\/em><\/p>\n<p><!-- MAILBAG BEGIN --><\/p>\n<h2 style=\"text-align:center\">Reader Mailbag<\/h2>\n<p>Do you trust big bank market calls?<\/p>\n<p>Let us know your thoughts &ndash; and any questions you have &ndash; at <a href=\"mailto:feedback@jeffclarktrader.com\" target=\"_blank\" rel=\"noopener noreferrer\">feedback@jeffclarktrader.com<\/a>.<\/p>\n<p><!-- MAILBAG END --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This strategy isn\u2019t complicated&#8230;<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[13],"newsletter-type":[],"ticker":[],"class_list":["post-19505","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-eric-shamilov"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19505"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19505\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19505"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19505"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19505"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19505"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}