As baseball fans look to Game 2 of the World Series on Wednesday night, investing fans may be in the late innings of their own game.
David Rosenberg, chief economist and strategist at Gluskin Sheff, believes both the bull market and economic recovery are nearing an end, winding down though not at the point yet of becoming completely undone.
"Most of the patterns, both in the realm of financial assets and the real economy, are flashing this signal — one of a very mature market," Rosenberg wrote Wednesday in his daily note to clients. "Now I am not sure if this is the seventh inning, or the ninth, it is likely somewhere in between."
For investors, that means reducing risk. While Rosenberg doesn't see an imminent collapse coming like the financial crisis in 2008, he does believe the focus should be on preserving capital rather than focusing on returns.
"Having cash on hand, reducing the beta of the portfolio, focusing on the running yield, and stepping up in quality across the capital structure are all going to pay off in terms of preserving capital, generating decent mid-single digit net returns at the very least, with a view towards allocating the dry powder at better price levels that will allow for a return to high-single digit or even double-digit returns once the dust settles," he said.