Diversify, the US Stock Market remains risk off

By Jeffrey Cohen, Investment Advisor in Highland Park, Illinois

A risk-off market means that a US stock market investor has to work harder to find an edge, or alpha, right now. The investor needs to hold more stocks, and put less money into each one.

Last night’s optimal ‘long’ or ‘up’ portfolio contained 65 stocks held evenly, including many large and Blue Chip stocks included. The edge over holding $SPY (the S&P 500 Equity Index ETF) was 7.1 x 10–5, which is relatively small.