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An ex-Wall Street chief strategist says the market's comeback has made most investors 'blissfully unaware' of its real risks a?? and lays out 6 reasons why another free-fall is on the cards

An ex-Wall Street chief strategist says the market's comeback has made most investors 'blissfully unaware' of its real risks a?? and lays out 6 reasons why another free-fall is on the cards


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Market indexes like the NYSE Composite and Russell 2000 show that stocks have not recovered as much as benchmarks of larger companies indicate, according to Peter Cecchini.




Cecchini, the CEO and founder of AlphaOmega Advisors, uses these indexes' performance to conclude that smaller stocks have actually been in a rough patch since 2018.




"Markets feel as if they are on the cusp of yet another significant risk off correlation event," he said in a recent note, outlining six reasons for his view.




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It's easy to look at the biggest indices of US stocks and draw sweeping conclusions about the overall market.It's even more tempting to do this because the biggest and most popular companies in the world dominate the S&P 500, Nasdaq 100, and Dow Jones industrial average. For Peter Cecchini, looking at these benchmarks alone is a foolhardy way of understanding how the market is really doing. Take the NYSE Composite Index, for example, which is down 8% this year and 6% from its 2018 high. Or the Russell 2000, which is still 12% below its 2018 high and down 10% year-to-date. "The truth of the matter is that, since 2018, most US equities have had a rough time of it," said Cecchini, the CEO and founder of AlphaOmega Advisors, and former global chief market strategist at Cantor Fitzgerald.
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