Douglass: In equities, we're in rarified air - it's getting pretty thin up here

Hamish Douglass, Portfolio Manager at Magellan Financial Group has expanded on recent comments about the fund managers increasing cash position. “If we’re right, we’re going into a stiff headwind over the next few years… In equities, we’re in rarified air -- it’s getting pretty thin up here. Through the lens we’re looking at, quite a lot of things look pretty expensive… It’s prudent to take out some insurance. If we underperform the benchmark because we’re wrong, that to me is just the cost of the insurance policy we’ve taken out. It’s extraordinary that more people aren’t doing it, to be honest.” Douglass also says their defensive portfolios are at their lowest levels ever. “We’ve been selling down defensive equities into this incredible risk compression and we’ve been offsetting that with a slightly higher growth portfolio and cash… If equities continue to go up in price and we continue to hold the view we have of what the world looks like in three years, all probabilities are that we would hold more cash in that environment.” Full article: (VIEW LINK)


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