Sell Signal

By on August 25, 2009

The Tactical Timing System has generated a sell signal. To comply with the system the following positions will be sold:

Bank of America (BAC)

Eaton Vance Floating Rate Trust (EFT)

General Electric (GE)

Hershey (HSY)

Target Allocation:

45% equities; 55% fixed income

Commentary: The bounce off the March 9th low has been one of the strongest cyclical bull moves on record. It will take a significant improvement in the economy to justify – which hasn’t shown up in the data yet. This appears to be a liquidity driven bull move, rather than one justified by fundamentals.

Special note: The Eaton Vance Floating Rate Trust (EFT) could be considered a bond holding, however, it has acted much more like an equity due to the low quality of the holdings. It also has seen a significant rise in its expense ratio, therefore, it will be sold.

Alternatives for the cash balance will be explored. PIMCO will soon release a short-term TIPS ETF, which will be considered. When the cash is invested an announcement will be made.

Disclaimer: It is very difficult to outperform a buy and hold strategy. Many investors have found themselves well-served over long time horizons by investing regularly in a diversified portfolio of stocks or low cost, broadly diversified indexed stock funds. Information presented is based on analysis of past data and assessments by the Tactical Timing System model. Future performance may not reflect past performance. Profitable trades are not guaranteed. No system or methodology ensures stock market profits. Although accuracy is strived for, no guarantee is made regarding the accuracy of data presented.


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