LSA PORTFOLIO CHANGES!

Once again we find markets reacting to poor language from the Euro Zone. It is hard to believe that it has now been two years of Greek headlines and once again we seem to be on the verge of once again deciding if Greece will decouple from the Euro Zone or if they will continue to kick the can down the road.

Equities were down sharply this week as concerns about a Greek exit from the Euro and solvency of Spanish banks led the news, and U.S. data was mixed. U.S. large-cap stocks dramatically outperformed small-cap and foreign issues. From a sector standpoint in the S&P, defensive industries like utilities and consumer staples outperformed, while financials and materials lagged.

Bonds inched upward on the week with movement away from risk assets. High yield and other corporates also lagged on wider spreads. On the year so far, the BarCap Agg has outpaced small caps, but continues to lag large caps. From a macro perspective, negative sentiment is pervasive in risk assets, and valuations remain attractive… not necessarily a bad combination—current volatility aside. Fundamentals continue to favor risk assets over fixed income.

Commodities were generally higher, due to agricultural contracts, but oil continued its slide along with industrial metals—both based on economic uncertainty. Gold has really sold off in recent months marked by a headline we happened to note on Wednesday: ‘Gold Tumbles Into Bear Market on Concern Greece May Leave Euro.’ At first glance, this condition is ironic and may have puzzled some gold bugs out there that figured another chapter in the Euro drama would favor ‘risk-off’ and ‘real’ assets like precious metals, as was the case from 2009-2011. Ironically, a stronger U.S. dollar may be gold’s biggest enemy lately.

With the recent pull back LSA is going to use this as an opportunity to revise some of the portfolios and conduct a complete rebalance. (more information below)

LSA Portfolio Revisions.

LSA will be posting revisions to portfolios over the next week. Given the recent volatility and pull back in the markets we are going to make a few changes to the strategies. We have been looking for the Dow to drop below 12,500 as a soft target to introduce the changes and 12,300 as a hard target. Given the pull back today we are going to go ahead and release the revisions and get portfolio traded before the holiday weekend.

Here is the scheduled release dates, please login to the LSA site to view all changes;

Wednesday May 23rd after market close:

  • Private Client
  • Private Client Less than 100K
  • Bear Market Entry
  • Cautious Bear Plus
  • Schwab NTF

Thursday May 24th –

  • ETF Strategies
  • ING VUL
  • Jackson National

Video commentary will also be posted on Thursday walking through what the revisions look like.

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