Sign up with your email address to be the first to know about new products, VIP offers, blog features & more.

Active Asset Allocation Trend Updates: June 2013

The Active Asset Allocation Portfolio utilizes a trend following strategy by buying and selling securities based on established price trends in each asset class. Below is a snapshot of the current trends we are following:

US Equities:

The trends in US Equities are currently in question. The markets have not responded positively to the news from the recent announcement from the Fed regarding the efforts to stimulate the economy. What does this mean? If recent history is an indication for what to expect, a market correction would occur but has not yet affected the overall positive trend. It could be a “speedbump”. When QE1 ended, the S&P 500 Index dropped by 15% but quickly rebounded leaving the overall trend positive. The same thing happened with QE2.

We continue to see some bright spots – technology, healthcare and financials seem to have avoided the same sort of decline as the S&P 500 experienced over the last few weeks. These groups might provide leadership in any “rebound”.

Foreign Equities:

The trends that exist in the U.S. equities are similar to the ones we’re seeing in the foreign markets.


During the month of June, we have lightened up on our bond holdings. Again, this can be traced back to the Fed. As the economy shows more signs of improving, the Fed will reduce its bond buying program and slowly raise interest rates. As interest rates rise, the value of existing bonds become less valuable since they pay a lower interest rate than newly issued bonds..

Real Estate:

Our longest held position is currently trying to find a trend. We have been pulling back on some positions and will continue to monitor it closely. The reasons for the trend reversal are similar to what was outlined above.


Our holdings at this time are minimal.