Asset Manager`s Dilemma In 2014

Slow Start for Stocks

The New Year has started (if you hadn`t noticed) and nobody is rushing in to buy everything that isn`t nailed down like last year where asset managers couldn`t wait from day 1 of 2013 to buy as much as possible.

Market Churn

Yes, the fed tapered a measly $10 Billion, but they still are pumping $75 Billion into markets each month, throw in the monthly 401kcontributions, and this market isn’t doing anything right now (even though the fed will still be around until this summer with artificial support).

Give me a Good Dip to Buy!

The conundrum for asset managers is that they need a good dip to buy! Considering the annual charade that is the holiday season: markets where traders, hedge funds and money managers yet to hit their goals push everything up while most of Wall Street is on vacation – these assets aren’t cheap! 

Asset Managers risk buying at such elevated levels (priced for perfection) that any bad news can send them easily down 7% with a drop of the hat, and this is not how an asset manager wants to start off the year from a 7% hole.

No Cheap Bargains in Stocks

Everybody knows that there is nothing real cheap right now to buy; this is the reverse of an after Christmas retail sale where all kinds of items are marked down for clearing out inventory. 

There are no after Christmas bargains here in Stock Land, and with signs the fed is contemplating leaving the party at some point in 2014, the usual fast start hasn`t happened this year. 

Comparing this to the start of the last five years – the first four months of the year have been as close to a sure thing for asset managers to get off to a nice healthy start as one could possibly hope for from a market environment perspective.

Remember those Huge Buying Days from January 2013?

This year is notably different in tenor, and yes it is still relatively early with only two weeks gone in the New Year, but the juxtaposition to last year is something to take note of.