On paper, it doesn’t look like the US stock market has had such a great year. They’re barely in the green, and have been very volatile.
But some perspective is in order.
Research and asset management firm Waverly Advisers has been advocating a simple trade since July: Long SPY/ Short EFA (The rest of the world)
As the chart shows, it’s been a fantastic run, as the US proves to be the “cleanest dirty short” or whatever metaphor you want.
Waverly chief investment officer Adam Grimes said in a note earlier this week:
“This spread continues to perform well. We believe domestic equities will outperform on either a broad rally or decline, and see the major risk to this trade as a protracted sideways trading range.”
Photo: Waverly Advisors
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