Russ Koesterich, the chief investment strategist at BlackRock, predicted that the equities market could get nasty and a correction is not far away. Koesterich told CNBC’s Futures Now that he thinks there are two factors in the near term that could potentially lead to this correction: (1) a spike in the price of oil caused by the worsening of the geopolitical situation in the Ukraine or the Middle East and (2) investor fears that the Fed will exit quantitative elasing and raise interest rates.
Because of the current complacency in the market, he advises investors to take out some longer term insurance.
“If you can use this low volatility environment to get some longer term insurance that’s a way to still be in the market and have some insurance for when and if that correction happens. It’s hard to predict the timing, but we know that with volatility this low, there’s not a lot of bad news discounted in the price of stocks.”
Watch the full Futures Now webcast.