A money manager is urging investors to shift their portfolios out of stocks amid the rally by Stephanie Landsman | @stephlandsman Money manager Douglas Gordon is worried about a potentially widespread problem in long-term investors' portfolios. Gordon, who's instrumental in building Russell Investments' asset allocation strategies, believes many investors haven't rebalanced their portfolios to reflect the historic 2019 stock market rally. According to Gordon, the market rally's robust gains are tilting investors too far into stocks. The bottom line: If there's another pullback, it'll leave them wide open to losses that may have been avoidable. "It's a good time to re-assess where you're at with respect to being diversified in a multi-asset solution," the firm's senior portfolio manager said Friday on CNBC's "Trading Nation." 

Since the Christmas Eve plunge, the S&P 500 has soared 18 percent. Because of the market's sharp rebound, Gordon suspects a 3 to 5 percent sell-off could strike stocks in the coming weeks. For protection, Gordon recommends taking some profits from the historic rally. Plus, he'd consider going overseas, a strategy he's employing right now as part of a balanced allocation strategy. "I'd probably right now prefer to take my higher beta exposures maybe in EM ," said Gordon, who's responsible for $48.5 billion of the firm's assets. Published at Sat, 16 Feb 2019 22:38:00 +0000 On the other hand, CNN Reports:

New York (CNN Business) Hedge fund manager Mark Yusko sees eerie similarities between today and the implosion of the dot-com bubble.

In late 2000, US stocks plummeted as investors fled overvalued technology stocks. But Wall Street rebounded in January 2001, leading many to conclude the worst was over. It wasn't. "We are experiencing tech wreck 2.0," Yusko, the founder and CEO of Morgan Creek Capital Management, told CNN Business last week from the sidelines of the Cayman Alternative Investment Summit. "We're definitely in a bear market. It started on September 21 of last year," Yusko said, referring to the day the S&P 500 last hit a record high. US stocks, as measured by the S&P 500, plummeted nearly 20% between last fall and Christmas Eve. That's just shy of what typically qualifies for a bear market. Vicious cycle? But Yusko doesn't think that matters. He believes the stock market is way too expensive and it will ultimately plunge at least 40% to 50% from all-time highs. "Amazon is a bubble. The stock is wildly overvalued. Netflix is even worse," he said. 

One crucial difference between now and the dot-com bubble is most of today's popular tech stocks are profitable. Back then, many money-losing companies were trading on ill-defined metrics like eyeballs. Another contrast is the rise of passive investing. Over the past decade, a flood of money poured into cheap ETFs that blindly track indexes. That's been a big boost during boomtimes but can backfire when investors all hit the exits at once. "There is this virtuous cycle that pushes everything to extremes," said Yusko. "Once that cycle turns, it becomes vicious. Selling begets selling." Markets have raced back to life Investors have piled back into tech stocks in 2019. Fears of an imminent recession have been eased by strong economic reports, progress in resolving the US-China trade war and a suddenly dovish Federal Reserve. The Dow soared nearly 400 points on Tuesday, finishing at two-month highs, as Congress and the White House neared a deal to avert a government shutdown. UBS urged nervous investors in a report published this week not to hide in cash, but instead to take the long-term view and consider hedging their portfolios.