CMG AdvisorCentral

Tactical investing news, views and resources for financial advisors

Tactical Rotation Strategy Webinar

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Michael F. Sciortino, Sr. Executive Vice President, Managing Director, Head of Distribution, CMG Capital Management Group

Michael F. Sciortino, Sr. Executive Vice President, Managing Director, Head of Distribution, CMG

On Wednesday, December 3rd at 12:00PM EST, Mike Sciortino and Michael Hee will discuss the CMG Tactical Rotation Strategy and why it makes sense in your clients’ portfolios today.

To register for the webinar, please sign up here:  https://www3.gotomeeting.com/register/119847414

The CMG Tactical Rotation Strategy (TRS) seeks to generate returns in all market conditions based on the concept that various asset classes and sectors experience bull and bear markets at different times.

The strategy employs an equally weighted strategic rotation model and allocates the portfolio to the top two asset classes from a universe of six: Domestic Equities, International Equities, Bonds, Commodities, REITs & Cash.

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Defining Tactical Investing

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PJ Grzywacz President, Chief Compliance Officer, CMG Capital Management Group

PJ Grzywacz
President, Chief Compliance Officer
CMG

In February, we launched CMG AdvisorCentral with our white paper titled “Understanding Tactical Investment Strategies.”  The paper was our endeavor to define tactical strategies in a constantly evolving industry.  Financial innovation, while providing investors better ways to build portfolios, has created a need for education and the clear classification of strategies, benchmarks and peer groups.

The growth of the mutual fund industry and the increased participation of retail investors, in the 1980s in particular, drove a need to educate investors and to help them sort through the various mutual funds.  The 80’s bull market for stocks and bonds drove investors’ demand for funds as well as their demand for information.

It was in this environment in 1984 that Joe Mansueto decided to start selling the Mutual Fund Sourcebook, Morningstar’s first product.  The next year, the company debuted the Morningstar Rating for mutual funds.  Fast forward 30 years, Morningstar has broadened its mission: it is now the largest provider of independent investment research in North America, Europe, Australia and Asia.  Morningstar provides data on over MorningStar-logo400,000 investment offerings, expanding well beyond the 400 mutual funds featured in the original sourcebook.

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Strategy Review & Cyclical Trends

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Steve Blumenthal, Founder & CEO CMG

Steve Blumenthal, Founder & CEO
CMG

CMG Tactical Strategy Review. No major changes since last week:  We continue to hold mostly long equity exposure in our CMG Opportunistic All Asset Strategies with a modest move toward emerging markets across the portfolio.  The portfolios are approximately 70% Equity, 30% Fixed Income.  Our CMG Tactical Rotation Strategy moved to a more defensive position for April: 50% TLT (iShares Treasury Bonds) and VNQ (Vanguard REIT).  High yield bond prices are firm to higher. We remain positioned long high yield bond fund exposure.

The cyclical trend remains positive as measured by Big Mo, investor sentiment is mixed and the Fed is supportive for now.  Immediately ahead of us is the seasonally challenged May-October period.  I believe that putting hedges in place remains the prudent thing to do.  Risk is so significantly elevated due to Fed manipulation.  The system is more leveraged than it was in 2008 and this cyclical bull is aged.  Tactical strategies can further your portfolio diversification in important ways.

Now, here is a look at the S&P 500 Cycle Composite for 2014.  The blue line in the chart below shows the tendency for the market to correct in the May to October period.

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