Bearish investors who have been calling a market crash have been disappointed for some time now. Headlines of a market crash coming in 2015, 2016, and so on have been met with ever-bullish investors driving all major global indices higher in recent years.
A combination of lax monetary policy from most global central banks, a lack of better alternatives with respect to bonds or alternative investments, and increasingly positive investor sentiment are all culprits for the continued rise in stock indices around the world.
With these drivers, among others, taking stock prices and valuation multiples into the stratosphere, many investors who tend to line up on the bearish side of the fence have become increasingly worried.
With this most recent bull market now approaching its one-decade old birthday, stepping back and looking for defensive opportunities in today's market (those that will trade sideways or perhaps increase in a declining equities market) may be the best way to go.
One sector which has traditionally done very well following sustained market turmoil is commodities. With the commodities index currently trading near all-time lows compared to the major indices, value investors and defensive investors alike have begun to consider commodities as a relatively safe way to play the market.
Going overweight commodities in a given portfolio is one way to hedge downside, while retaining some upside should the rally continue, as many commodity names are currently undervalued on the TSX and NYSE.
Invest Wisely, my friends.
