August 23, 2006 at 8:35 am by Tom Lydon
Tom Leswing of Ignites reports that tactical asset allocation funds that use exchange traded funds are having a hard time. There are very few of these funds that focus on ETFs and the two main ones that do are in trouble. PMFM Tactical Opportunities Fund (ETFTX) is closing and USAA Total Return Strategy Fund (USTRX) is also having problems as both of these funds are underperforming the S&P 500.
While we use a tactical asset allocation strategy, it is important to keep a strict discipline and sell when an ETF goes below the 200-day moving average or when it has dropped 8% from its high. There are some people who do a good job with tactical asset allocation and some that don’t.
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