Top Forecaster Yves Lamoureux looks at the current investment landscape, from stocks to cryptocurrencies, and sees only two ways to go.

Fear not, investors aren’t sure which way to go these days when it comes to the stock market and cryptocurrencies. There are only two real options, according to the president of macroeconomic research firm Lamoureux & Co., Yves Lamoureux, who has the knack of predicting the direction of the market. After nailing a panic event in 2018, he forecast a series of bear markets spurred by COVID-19 waves last year, correctly calling a market bottom in March 2020.

The Montreal-based forecaster in September predicted a subsequent rally, saying the market’s pullback was over, and now it is forecasting a third leg lower, though perhaps not a direct takedown. The question about its duration is “because there is so much interference from the Federal Reserve and central banks [as] everyone tries to keep profits high, ”he said. Except for a campaign of this type, the decline would be rapid, probably more than a year. Central banks, Lamoureux said, could instead cause the kind of decline that “goes on a little longer.” He said his company ran out of shares at the end of 2020. “We have seen the liquidity peak where all the central banks have done the best they could, but after that we will find that there is simply not enough liquidity to support all the markets. , not just stocks, “he said. Read: Yields are falling, but US economic indicators are improving. This is what is driving the bond market ‘datapathy’. One of his enduring views is that rates will embark on a decade-high gear. Investors got a taste of it in March, when the yield on the 10-year US government bond BX: TMUBMUSD10Y rose to nearly 1.8%, hitting tech stocks especially hard. The debate continues to simmer over whether investors will see this situation repeat itself as the US economy strengthens. Asset manager BlackRock is among those who don’t see rates spiraling out of control, but such a scenario was recently flagged as a maximum risk for stocks over the next 12 months in a Barron’s investor survey. Meanwhile, Lamoureux has consistently warned clients, including via Twitter, as it did last October when the 10-year yield slipped to 0.7%.

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One result of the higher rates is that stocks and bonds take a hit, making it harder for fans of passive strategies like buying and holding to make money. That said, Lamoureux also predicts the opportunity may hit equity investors soon, as he forecasts bonds to stabilize in the second half of this year, before rates return to an upward path beginning in 2022. Opinion : Why will it take more than easy money from the Fed to keep sparking this bull market in equities? “So that window will give people a chance to get back into tech stocks, because that’s what got hit the hardest in this big bull move.” in rates, ”he said. “In technology they have dropped a lot. That’s the area that I think is attractive. “However, Lamoureux said investors need to start taking steps now to protect themselves in the future. One way is to shed the passive blanket and” look at markets that are really beta, beta higher. , which means they move more than the normal market. And they have made a lot, a lot, a lot of money in SPACS, “he said. SPACs, or special purpose acquisition companies, are also known as blank check companies. as they raise money in an initial public offering and then have two years to acquire a business or businesses. They have been called private equity of the poor because they allow ordinary investors to enter potentially hot stocks outside of public markets. “I’m talking with a lot of professionals, and they are basically beginning to realize that there is this new market … that gives people the opportunity to buy stocks as venture capital, “said Lamoureux, who Who pointed out the asset class in a MarketWatch Interview last September. Note that SPAC’s offerings have started to slow down after a surge in 2020, with some warning of a bubble in the category that could turn against investors. Bubbles are a “regular feature” of SPACs, Lamoureux said, adding that investors simply don’t have much of a choice these days. “We have seen the explosion of bonds, [and] that is a loss of liquidity. I’m ordering flysheet oil and head down. That will be a loss of liquidity. If you look at all the tech stocks that were very popular, they have plummeted, “he said. Named cloud data software company Snowflake SNOW, + 0.19%, as one example among many of a “very popular, very good company” that suffered a sudden drop in valuation – its stock price dropped by almost $ 400 in December to just over $ 200 in March: when interest rates rose. The Nasdaq Composite COMP, -0.07%, has practically recovered its losses from the lows of late March when the yield on the 10-year US Treasury BX: TMUBMUSD10Y rose in late March. Snowflake shares were hovering around $ 239 on Wednesday. “The higher rates will have massive implications not only for bonds, but also for stocks and real estate, which has become the largest bubble in history,” he said. Also, with higher debts and loans, higher taxes will come, and that will be “bad for stocks,” he added. Better Than Coinbase Lamoureux has also made prophetic calls when it comes to cryptocurrencies. In February 2017, when a bitcoin was worth $ 994, he predicted that the value would reach $ 25,000 in the next 10 to 15 years, and Bitcoin went on to touch $ 20,000 before melting. He accurately rated bitcoin’s push to $ 16,000 in mid-2020, and called for funds up to a recent record high above $ 64,000, but said his company exited crypto around $ 50,000 for indirect exposure through the exchange. of bitcoins and the Bakkt digital asset market. That company is a better long-term game than the recently listed digital exchange Coinbase COIN, -0.57%, “because it fits in with what I think is to come,” he said.

“People are crazy. Like they buy a story after the fact, and the story is ready, you know? Bitcoin has gone up and these guys have made a lot of money, so people are buying Coinbase at scandalous levels,” he said. Read: The world’s largest crypto exchange is launching an NFT market. What to know Launched in 2018 by New York Stock Exchange owner Intercontinental Exchange ICE, -0.71%, Bakkt to go public through a merger with VPC Impact Acquisition Holdings HIV, + 0.46%, a SPAC, in a deal that values ​​it at $ 2.1 billion. The merger is expected to close in the second quarter. With Bakkt, he said, investors get a bitcoin exchange that trading futures and options, and a custodian: crypto storage plus an app, he’s excited about, after he bought the SPAC. “It’s a new lifestyle app that will increase bitcoin adoption and add loyalty points, gift cards or, airline miles, coupons and in-game assets from your digital assets, ”explained Lamoureux. For example, users could take their points from the Starbucks SBUX coffee chain, -3.12%, convert them into cash and buy bitcoins with that application, creating interrelationships and “some kind of ecosystem,” he said. Instead of trying to forecast the price of bitcoin, [Bakkt] lets you play the bitcoin adoption curve. “Bakkt may not stop there. In an interview earlier this month, CEO Gavin Michael said the company could introduce non-fungible tokens (NFTs) on the platform in The future. Popularity has risen for NFTs, a certificate of ownership of a unique digital asset, over the past year, featuring an artwork using digitized technology that sold for nearly $ 70 million in March. Michael also said they also envision the ability to “contribute and participate in the central bank digital currency space.” Read: ‘Disaster Girl’ makes over $ 430,000 selling her meme NFT For Lamoureux, Bakkt’s rationale is basic : “Pick and shovel sellers have always made money. Ask the gold diggers.”