Very superstitious, ladders bout' to fall
Thirteen month old baby, broke the lookin' glass
Seven years of bad luck, the good things in your past
When you believe in things that you don't understand
Then you suffer
Superstition ain't the way
Happy Friday the 13th, nothing scary here, just keep moving along. So far in 2012 the S&P 500 is up 2.2%, Emerging Market stocks are up 3.6%, and Gold is up 4.6%. A few scary happenings over in Europe as investors struggle with the term "voluntary haircuts". EAFE stocks down 0.02%, and International Bonds down 3.22%.
We've made some big changes to our allocations this year, here's an update:
Here's where we stand today in our Global Tactical Asset Allocation Portfolios:
The big change from the end of the year were the increases in US stocks (VTI) now bullish, US real estate (VNQ) now bullish, the total elimination of Developed Market International Bonds, and a swap out of the Total US Bond market (BND) into the US Long-Term Treasury Bonds (BLV). Cash was lowered slightly to 29.5%. Exposure is similar to a barbell; US Equities & US REITS on one end and US Long-Term Bonds on the other, with very little in the middle, other than cash.
US Equities -- 20% Bullish,
we are now at our full US equity weight.
Int'l Equities -- 5%
Bearish, we are now at our minimum International equity weight.
US REITs -- 6%
Bullish, we are now at our full US REIT target of 6%.
Int'l REITs -- 2% Bearish
. The sell-off in Europe has knocked these stocks down.
Gold --6% Neutral, Gold is neutral but the gold miners have been acting poorly.
Commodities -- 5% Bearish, we are now at our minimum target of 5%
.
US Fixed Income -- 24.5% Bullish, a flight away from European debt continues to benefit US bonds, both Treasuries and High Yield.
Int'l Fixed Income -- 2% Bearish, We've totally eliminated our exposure to European & Japanese bonds. Still maintaining a minimum exposure to Emerging Market bonds.
Cash Equivalents & Currencies -- 29.5%, divided between the US at 30%, 5% in China, and 3% Australia.
President Hits Head On Ceiling:
In case you missed it we've hit our debt ceiling again, and President Obama is asking his colleagues in Congress to bless another increase. Here is an excellent video that puts the Debt Limit in perspective. Enjoy:
Another nice graphic of just how volatile 2011 was compared to the prior decade. Even though the S&P 500 ended the year basically unchanged, it was a hell of a ride:
When it comes to investing I think Stevie Wonder said it best, "When you believe in things that you don't understand, then you suffer."