The Tactical Timing System has generated a buy signal. To comply with the system the following positions were purchased and funded with the sale of a portion of the Vanguard Short Term Corporate Bond ETF (VCSH).
Position (Symbol) Allocation
Vanguard European ETF (VGK) 6%
Vanguard High Dividend Yield ETF (VYM) 6%
Pepsico (PEP) 3%
60% equities; 40% fixed income
Below is an image of the trade confirmations (click to enlarge):
SMA Comment: Fear has gripped the world stock markets due to a confluence of factors. Recession possibility, European contagion, the U. S. debt downgrade, and exploding deficits have converged to create a perfect storm leading to investor panic. Coupled with a leveraged hedge fund complex (many who are in forced liquidation mode), the fear creates an opportunity to purchase assets at what appear to be bargain prices. There will be rebounds and nimble traders can profit in this environment.
The buy signal doesn’t guarantee a bottom is near or imminent. It would be nice if that were the case. The buy signal merely means there is above average fear in the psyche of investors leading to more favorable prices for buyers of equities.
The current U. S. oligarchical political system operating under the guise of a capitalist democracy lends itself to crisis as wealth is transferred to a socialized elite whose gains are protected through bailout and subsidization, while the losses are born by a largely ignorant mass of citizenry distracted with beer, baseball, football, and right-wing political talk radio. This is an ideal mix for wildly fluctuating (and rigged) financial markets. An announcement by government officials could come at any time leading to a massive bounce in prices.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.