OTM Market Update – More of the Same

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Prior Week Market Performance:

  • The S&P large caps gained 2.6% last week to 2108.06.
  • The Russell 2000 small caps gained 2.8% last week to 1266.37.
  • Long Bonds (TLT) gained 3.8% last week to 131.51.
  • Asset Allocation Model: unchanged.  Stocks (52.5%); Bonds (27.5%); Discretionary (20%)

 Last Commentary (two weeks ago):  The Asset Allocation model remains unchanged for long term investors.  IF we were to get further deterioration then it would be time to take a different tack.  We get closer to a shift from long bonds, but not yet.  Not yet.  Be patient. read more

OTM Market Analysis – Are you a Long Term Investor?

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Prior Week Market Performance:

  • The S&P large caps lost 1.6% last week to 2071.26.
  • The Russell 2000 small caps lost 1.3% last week to 1217.52.
  • Long Bonds (TLT) lost 4.7% last week to 123.50.
  • Asset Allocation Model: unchanged.  Stocks (52.5%); Bonds (27.5%); Discretionary (20%)

 Last Week’s Commentary:  Same as the week before.  The correlation between SPY and TLT (S&P to Long Bonds) is 0.28, implying little correlation at all.  As long as Yellen and the Fed are going to be cautious about raising rates, TLT and its 2.4% dividend yield is not a bad bet to offset the riskiness of the equity portfolio.  That being said, we are nearing the point where we’ll start to shift the bond position from long to short.  That point is coming read more