An Alternative to Going to Cash in May

By on May 9, 2011

Selling equities in May and avoiding them for six months has been written about extensively over the years.  The blog Econompic has an alternative to employing cash as the “safe” asset.  Transferring to the Long Government / Credit bond Index (GBF) has demonstrated stronger risk adjusted performance which Econompic refers to as the “Secret Sauce.”

SMA Comment:  This strategy has probably worked well over the past 30 years while long bonds have been in a secular bull market.  It will likely provide anemic returns when bonds enter a bear market phase.

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 Source: EconomPic

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