A few days ago, it looked like equity prices were finally going to roll over and sell off for a while. Price action was weak suggesting that buying power was waning. We held this view because small-cap stocks were starting to fall in an environment where the Price/Sales ratio of the S&P 500 was and is at an all-time high and debt is aggressively being used to buy back shares. At the same time, the CPI & PPI are rising rapidly suggesting interest rate hikes are just around the corner. In this environment, we thought investors should start to entertain the idea of hedging a portion of there portfolio's market risk.
