WALL STREET IS FRONT RUNNING REBALANCING LEADING TO A RALLY IN THE STOCK MARKET
By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Quarter End Rebalancing
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart compares SPY with NASDAQ 100 ETF QQQ and bond ETF TLT.
- The chart shows that so far in this quarter QQQ has lost 24.57%, SPY has lost 19.91%, and TLT has lost 14.74%.
- In quarter end rebalancing, investors will sell bonds and buy stocks. This is an age old tradition. The argument is that stocks should be bought because they have gone down more than bonds.
June 21, 2022