In summary, don’t become complacent following the outlier year of 2013. Risk management is only effective as an ex ante process. By the time the loss event occurs, it is too late to protect capital. While the above risk factors that I am focusing on are not currently flashing caution, that will not be the case forever. The ATAC models my firm uses for managing our mutual fund and separate accounts are currently invested in U.S. small caps, reflecting a positive near-term outlook for equities. However, we remain focused on risk management and are prepared to rotate into more defensive areas (bonds) when the investing environment changes.
This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.