Tactical management was created to meet the typical investor’s needs and expectations. While still considered active, tactical management is quite different. Tactical management seeks growth during “normal” times but is engineered to avoid the majority of the losses found in a bear market. Put simply, tactical managers, most often following rules-based systems, do the buying AND selling for you.
No strategy can avoid all the losses, but as the data above illustrates, the losses found in bear markets typically take years to unfold. It is time to recognize that our industry needs to provide investors options that remove emotion, smooth the ride, and provide investors the opportunity to stay invested throughout the full market cycle by not subjecting them to large, devastating losses.
Copyright © 2016 Beaumont Financial Partners, LLC. All rights reserved. All materials appearing in this presentation are protected by copyright as a collective work or compilation under U.S. copyright laws and are the property of Beaumont Capital Management. You may not copy, reproduce, publish, use, create derivative works, transmit, sell or in any way exploit any content, in whole or in part, in this presentation without express permission from Beaumont Capital Management.
This material is provided for informational purposes only and does not in any sense constitute a solicitation or offer for the purchase or sale of securities nor does it constitute investment advice for any person.
The views and opinions expressed throughout this paper are those of our Portfolio Manager as of December 22, 2016. The opinions and outlooks may change over time with changing market conditions or other relevant variables.
The information presented in this paper is based on data obtained from third party sources. Although it is believed to be accurate, no representation or warranty is made as to its accuracy or completeness.
Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. As with all investments, there are associated inherent risks.
An investment cannot be made directly in an index. Beaumont Financial Partners, LLC DBA Beaumont Capital Management – 250 1st Avenue, Suite 101, Needham, MA 02494 – (844) 401 -7699 salessupport@investBCM.com.
1 Chart source: Source: Global Asset Allocation (Chapter 3) via mebfaber.com, Meb Faber, March 6, 2015. Bloomberg for the period 1973-2015. The data shown for Convertible Bonds, Preferred stock, High Yield Bonds and MLPs is sourced by Bloomberg. They use the same end date as the rest of the asset classes (12/31/15), but have different starting dates due to the fact the indices for these asset classes did not exist in 1973. Convertible bonds is for the time period starting on 6/17/1986, Preferred stock data starts 9/9/2003 and the MLP data begins 12/21/1995. The returns shown are “Nominal Returns” for the time period specified. For more information on what each asset class performance is represented by, please reference the disclosure pages. “EAFE” represents the regions of Europe, Australasia and Far East. Asset class performance is represented by the following: U.S. Large Cap – S&P 500; U.S. Small Cap – French Fama Small Cap; Foreign Developed – MSCI EAFE; Foreign Emerging – MSCI EEM; Corporate Bonds – Dow Jones Corporate; T-Bills – U.S. Bills; 10 Year Bonds – U.S. 10-year bonds; 30 Year Bonds – U.S. 30-year bonds; 10 Year Foreign Bonds – Foreign 10-year bonds; High Yield – iBoxx Liquid High Yield; Convertible Bonds – Vanguard Convertible Securities Fund; Preferred Stocks – S&P Preferred Stock; MLPs – Alerian MLP; REITs – NAREIT; Commodities – GSCI; Gold – GFD.
2 Source: J.P. Morgan Asset Management; (Top) Barclays, FactSet, Standard & Poor’s; (Bottom) Dalbar Inc.
Indexes used are as follows: REITS: NAREIT Equity REIT Index, EAFE: MSCI EAFE, Oil: WTI Index, Bonds: Barclays U.S. Aggregate Index, Homes: median sale price of existing single-family homes, Gold: USD/troy oz, Inflation: CPI. 60/40: A balanced portfolio with 60% invested in S&P 500 Index and 40% invested in high quality U.S. fixed income, represented by the Barclays U.S. Aggregate Index. The portfolio is rebalanced annually. Average asset allocation investor return is based on an analysis by Dalbar Inc., which utilizes the net of aggregate mutual fund sales, redemptions and exchanges each month as a measure of investor behavior. Returns are annualized (and total return where applicable) and represent the 20-year period ending 12/31/15 to match Dalbar’s most recent analysis. Guide to the Markets – U.S. Data are as of September 30, 2016.