Tactical Asset Allocation – October 2017

Tactical Asset Allocation Strategy Update

Performance

Global Core is up 0.67% for October and up 9.48% YTD

Big cap domestic has been the major contributor this month with small assists from domestic small cap and emerging markets. Treasuries have declined modestly.

Market

This market has been nothing short of amazing in its ability to rally, interrupted only by the smallest of corrections. While the FANGs are reaping the largest share of the gains, the rest of the equity market is doing a decent job of riding their coattails. Sector rotation has been continuous as each plays catch-up when left behind.

Yields on longer dated Treasuries have strengthened and appear headed higher. While this creates a small drag on our Core Strategy, it will provide more opportunity for returns when the Market Conditions Model recommends shifting some funds into Global Satellite (Hostile).

Earl Adamy

Tactical Asset Allocation Strategy Performance

Global Strategy (Conservative)

Month: 0.67% gain
Year-to-date: 9.48% gain
Full cycle-to-date (Sep 2007): 13.72% CAGR, 7.14% Max Monthly Drawdown

Global Strategy (Aggressive)

Month: 0.67% gain
Year-to-date: 9.48% gain
Full cycle-to-date (Sep 2007): 17.24% CAGR, 8.22% Max Monthly Drawdown

Tactical Asset Allocation Fund Basket Performance

Global Core

Month-to-date: 0.67% gain
Year-to-date: 9.48% gain
Full cycle-to-date (Sep 2007): 10.18% CAGR, 6.54% Max Monthly Drawdown

Global Satellite (includes Favorable & Hostile)

Month-to-date: hibernating since Jul 2016
Year-to-date: hibernating since Jul 2016
Full cycle-to-date (Sep 2007): 21.93% [email protected]*, 8.21% Max Monthly Drawdown

*CAGR for the Favorable and Hostile Market Conditions during which Global Satellite was invested

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3 thoughts on “Tactical Asset Allocation – October 2017”

  1. Thanks Earl. I’m probably missing something, or forgetting, but my understanding is that the satellite basket would never be employed during hostile market conditions, yet the full cycle [email protected] above reports exactly that. My guess is that there nay be brief overlap periods where this occurs, but would appreciate your response. Thank you, as always.

    • That is exactly where we were a year ago; however I was very frustrated with the prospect of missing returns during a strongly trending decline. It took me two years of testing strategies before I found a low-risk, high return strategy for Bear Markets. Once I had the strategy in hand, I needed to upgrade the Market Conditions Model to signal when the strategy was to be deployed. We now have Global Core and two satellite strategies: Global Satellite (Favorable) and Global Satellite (Hostile). If you’ll go to the Strategies page, scroll down to #2 Basket Selection, and have a look at the Global Satellite column, you’ll find a summary with a chart and 3 tables showing performance combined and individually.

  2. Yes, now I remember. I had forgotten about the Hostile Satellite basket, so misunderstood, thinking you were referring to the same basket for both conditions. Thanks.

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