Barry Ritholtz, chief executive at quantitative research firm Fusion IQ, in a Forbes interview says the firm is long the market and its holdings include exchange traded funds tracking the total stock market and dividend stocks.
“We’re now about 86% long and have been for some time,” said Ritholtz, who also writes The Big Picture, a popular blog.
“I think many people had expectations that with the coming end of QE2 the world was coming to an end and that the market was coming to an end. We just don’t see that happening anytime soon,” he said in the Forbes interview.
“Right now, I think we’re at the phase of the market where a lot of people are specifically looking for a correction, and we just don’t see that as imminent,” Ritholtz said. “While there’s very likely a 25% correction, somewhere out in the future, we’re just not there.”
Fusion IQ includes Vanguard Total Stock Market ETF (NYSEArca: VTI) in its holdings. “That’s just a broad market holding. It trades a couple million shares a day,” Ritholtz said.
He noted the total-market ETF isn’t disproportionately impacted by a handful of stocks. “Vanguard Total Stock Market Fund is low cost ownership and is instant exposure to the long side of equities with very little – I would go so far as to say no – single stock risk,” Ritholtz said in the Forbes interview. Conversely, he said the PowerShares QQQ (NasdaqGM: QQQ), which tracks the Nasdaq-100 Index, has large stakes in Apple (NasdaqGS: AAPL) and Google (NasdaqGS: GOOG) that tend to overwhelm the other stock holdings.
“We’ve played around with a handful of other names,” Ritholtz said, mentioning SPDR S&P Dividend ETF (NYSEArca: SDY), a basket of dividend stocks.
“Some of the more conservative portfolios wanted to have access to dividends,” he said. “In a conservative way, that’s been a nice holding for us. It’s worked out well.”
SPDR S&P Dividend ETF
