The quick turnaround for stocks from their drop into the fastest developing Bear market in U.S. history stands in stark contrast to every major economic indicator remaining in negative territory. There are a few possible reasons for this. Among them are the semi-renewed sense that the bottom has already been in and a sense that the quickly established federal stimulus and protective programs now in place will sustain the economy until a full reopening can occur. Even so, there is no denying that increasingly negative numbers in key sectors such as manufacturing, home sales, energy, and others indicate that there are still multiple pain points to overcome before the U.S. once again enjoys bullish sentiment across the whole of the nation.
Our allocation at the beginning of April was very conservative. The Stadion Tactical Growth Fund held 35% U.S. Equities, 15% Short-term Fixed Income, and 50% Money Market. U.S. Large-Cap Growth was the first equity sector to move up our rankings and we bought a 5% position in S&P Large-Cap Growth on April 8.
Biotech funds were next to move up and on April 14 we bought 5% Biotech and 5% more S&P Large-cap Growth. On April 22 we opened a 5% position in a different Biotech fund and sold 5% of our MINT [short-term FI]. On April 28 we added a 10% allocation to the Russell 2000 small-cap index. TG ended the month with 65% allocated to U.S. Equities, 10% to short-term Fixed Income, and 25% to Cash/Money Market. We are watching our holdings very closely and will not hesitate to, once again, move to a more conservative posture if our rankings weaken.
To view the most recent performance for the Stadion Tactical Growth Fund, click here.
A bear market is a condition in which securities prices fall and widespread pessimism causes the stock market's downward spiral to be self-sustaining. Investors anticipate losses as pessimism and selling increases. Stadion defines a bear market as a time when market indices fall at least 20%.
One cannot invest directly in an index.
The Report’s commentary, analysis, opinions, advice, and recommendations represent the personal and subjective view of the author and are subject to change at any time without notice.
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