Weekly Commentary

July 21, 2010

We have mentioned before that volatility cuts both ways, up and down. The last few weeks since early July have been a stark reminder of that. Following a nice run up in prices, the markets have fallen back several percentage points, and are continuing the recent sideways trend started in mid May. For the Stadion Investment Model, a sideways trend is not necessarily a bad thing; it allows our indicators time to get back to a more neutral reading after descending to an extreme negative level as a result of the market selloff beginning in April. The longer the markets continue to seesaw, the closer Stadion will be to putting assets to work in the equity markets quickly when a rally finally begins. Until market breadth has improved to the point that the Stadion Model calls for a shift in allocations, we will continue to defensively position the portfolios in cash and fixed income ETFs. - SMM-072010-129

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