Why Dennis Gartman Is Urging Investor Caution As Rates Rise

Dennis Gartman is becoming increasingly cautious on stocks amid the rising-rates environment.

What To Know: The former publisher of "The Gartman Letter" and current chairman of the University of Akron Endowment recently exited some stock positions and feels content sitting on the sidelines, according to a Bloomberg report.

"I got stopped out of a lot of long positions on Thursday and Friday of last week," Gartman said. "I’m happy to be basically as flat as I’ve been in a long period of time."

Gartman has been expecting a bear market for quite some time. Although he was wrong about his predictions in 2021, he's ahead of the curve this year.

In January, Gartman predicted a 15% decline would hit the S&P 500 in 2022. The closely-watched stock market index is down nearly 11.5% year-to-date at time of publication. Now Gartman says even more downside may be ahead.

"It could go quite a good deal farther to the downside," he said. "The use of margin has been declining. That’s always one of the signs of a top in the market. Be careful. I think it goes down another 5%-10% from here. At least. Maybe more."

Related Link: 3 Reasons Inflation May Be Peaking

Along with the stop-loss protections, Gartman also noted he began trimming the university's portfolio at the end of last year.

The Fed is expected to raise rates by 50 basis points in May. At the very least, a 50 basis point hike is "on the table," according to recent comments from Fed chair Jay Powell. Many expect another 50 to 75 basis point rate hike to follow in June.

SPY Price Action: According to data from Benzinga Pro, the SPDR S&P 500 SPY is down 2% at $419.57 at time of publication.