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.