Timeous

A very good week. Asset allocation calls now ahead again versus Traditional AA, thanks to strong hedge fund recovery and slight reversal of post-election whipsaws in stocks and bonds. I maintain my belief in model / AA calls...for now. Watch for a sustained stock downturn to switch positioning. Can the Trump rally hold? I think it can (Trump tax cu... ts and regulatory burden lifting), BUT these things won't happen overnight and there remain real impediments: Federal Reserve rate hikes (going to be more than they let on), corporate earnings which continue to struggle (despite rosier 2017 earning outlooks being bandied about), EU break-up possibility, market now 30% overvalued, fiscal uncertainty, and still very low fear. Prefer SPY for low cost, liquid broad market exposure. Bonds have bounced off their post-election lows. Crunch time on the reflationary trade. I don't deny it; I just feel its premature. I continue to expect stock retrenchment before I change bond weighting position. So, if you still buy into the underweight stocks positioning then, you must be overweight US bonds. Investors flock to the "safety" of bonds during stock market downs/tests. Prefer BND for broad market, liquid exposure to bonds. By alternatives, I do NOT mean commodities or private equity. I mean hedge fund strategies and encourage a permanent 25%+ asset allocation. Importantly, know what the strategy is, who is running it, and be able to verify without need of unknown auditor 15 months down the road. Return shown above refers to a blend of leveraged market-neutral hedge fund average ( HFRXEMN ), my market-neutral strategy return and the results of the (3% stop loss) Focused Long-Short Portfolio ideas below. The unlucky streak of 2016 for the market-neutral approach is now officially over! The rebound is already proving tremendous. FYI - I have a bias (Timeous Market Neutral strategy). Despite the rate rise, the Fed is still dovish (i.e. continued easy money), but wants to rebuild rate capacity in order to cut when the next recession ...Read More