Robert Sechan: Investors’ Cash Position Is Increasing

In the interview, UBS (UBS) Managing Director Robert Sechan said that volatility is increasing in the market (SPY) (QQQ). In the current situation, markets look doubtful. We might see a great market swing ahead of the US presidential election.

At the time of the Brexit vote, we saw that an enormous amount of cash was waiting to go to the right market. So, immediately after the Brexit outcome, the demand for the dollar (UUP) increased sharply. He said that in the current situation, there’s an “enormous amount of cash on the sidelines waiting to be put to work.” Volatility is increasing in the market. The Volatility S&P 500 (VIX) index fell 22.80% on a YTD (year-to-date) basis.

Robert Sechan said, “Our average client at UBS has 22% in cash.” The increasing cash position is showing that there is more uncertainty about the market. The upcoming US presidential election and the Fed’s gradual rate hike process will impact the market (VOO) (IWM) movement. He said, “We are looking for a pullback of 5%, not massive sell-off.”

In this current environment, Bill Smead advised that housing sector is looking good. He disclosed that NVR (NVR) is his second-largest holding. Many financial stocks such as JPMorgan Chase (JPM), Wells Fargo (WFC), and Bank of America (BAC) are his top stock picks. He expects that these stocks will perform well.

Read Icahn at the Delivering Alpha Conference: Market Looks ‘Dangerous’ to learn more.