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Tuttle Tactical Management Weekly Market Notes

Tuttle Tactical Management, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. You should not assume that any discussion or information contained in this letter serves as the receipt of, or as a substitute for, personalized investment advice from Tuttle ...


The trend in stocks is still up but the rally is still showing signs of being “tired”. That should change this week as we have a lot of data coming out about jobs and inflation, the two things that the Fed cares most about and the two things that will impact Fed policy going forward. I would expect large moves one way or the other depending on how the market thinks the Fed will react to the data.

Whatever happens is just “noise” as stocks are still the only game in town as long as interest rates stay at zero.

Recent Moves
We added countertrend positions the S&P 500 in our Trend Aggregation Strategies this week based on market weakness. All of our strategies are now at maximum positions in stocks.

How Do the 60/40 Guys Sleep at Night?
The 60% Stock/40% Bond portfolio is often the gold standard that other investment strategies are compared to. Over time an investor who simply had 60% of their portfolio in an index fund and 40% in a bond fund would have done ok, if you ignore large losses from 2000-2002 and 2008 of course. Frequent readers will know that I often talk about past performance being pretty much meaningless, the key question isn’t what something did in the past, it is what it is likely to do in the future. Past performance is only interesting if it is sustainable.

That being said I wonder how proponents of the 60/40 portfolio can sleep these days. They are forced into a 40% allocation to bonds that look like they are at the end of a bull market. They are also forced into a 60% allocation to stocks, that is good right now, but it is increasingly looking like the Fed is creating a bubble in the stock market. Being tactical I don’t care as I can just get out. Having a fixed 60% position in stocks going into 2014 when it is likely that the Fed will be taking the foot off the gas would scare me.

Top Holdings

1. US Small Cap Stock
2. S&P 500
3. Cash
4. US Dividend Stocks


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