SARA SILVERSTEIN: We have a few member questions on our ETF position, starting with our inverse ETFs. You've been hanging on to these for a little while now. What do you need to see before making an exit?
CHRIS VERSACE: Yeah, so I touched on this earlier in the program, but just to be clear, we really want a sense that we're exiting that bear market. The extent that earnings expectations could be stronger than expected would be one clue that we're looking for. We're also closely monitoring some seasonality in the market as well.
We touched on that with Carley Garner on the recent podcast where she was saying that going into the early part of July, it tends to be a bullish time for the market. Second half, however, doesn't necessarily seem to be the case. In fact, over the last-- I think it's 15, 16 years, typically late July, early August, you tend to see a sell-off in the market.
So we'll be navigating that. We do want to keep that hedging exposure until we're rather confident that that worst of the-- worst of that, and perhaps a bull market is indeed emerging, is clarified and codified to us before we make that move.
SARA SILVERSTEIN: And summer is often a time that we go away from the market a little bit or it seems like there's some of the activity, like you said, is a little bit softer. Is this a good time or a bad time for someone that has too much cash on the sidelines to add to their portfolio?
CHRIS VERSACE: Wow that's a great question. And I say that because, just given my comments about the seasonality a second ago with the second half of July into August, and as I look at it on the calendar, we're July 19, so not saying that it's absolutely going to happen, but the odds of it happening are far better.
The other thing, too, that I would be wary of, just some comments, and I shared them this morning, one from Charles Schwab, that it saw during the second quarter a disproportionate amount of buying going on compared to selling. And then Bank of America also said that it saw something like $70 billion come into global equity funds over the last several weeks.
That certainly explains some of the continued lift that we're seeing in the market. My concern here is that if we don't get that earnings growth for the S&P 500 that has to be better than what the market is looking for, you look at the current multiple for the market, north of 20 times on 2023 earnings, the question becomes, where does the market go from here?
So I would hesitate before say going chips in and putting all that cash to work. I think there'll be opportunities to pick up individual stocks on a piecemeal basis, and I would suggest that members follow our lead because that's certainly what we intend to do.