After a more than seven-year bull market, investors can no longer rely on an S&P 500 index ETF for easy gains. According to NMG Capital’sNed Gandevani, the level of overall market risk these days means traders should be very selective when it comes to stocks.

Gandevani argues that the uptick in market volatility since mid-2015 is typically an indicator that the market will soon move up to new highs or move down to make a major correction. These days, he believes the risk is to the downside.

Gandevani points out that the spread between earnings yield and dividend yield for the S&P 500 is currently around 1.97, and it recently dipped below its 10-year moving average. He views this drop as confirmation that the overall market has become a riskier investment.

“Considering the dividend-paying stocks is a main asset in q fixed income portfolio, to have a low spread indicates…

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