“In our portfolios, we have moved into a defensive position, with equity allocations about 10% below policy targets. The recent backup in interest rates has made bonds a bit more compelling versus equity markets that are showing some early signs of technical weakness. We believe that a modest correction is most likely and we would be buyers of stocks at lower prices or if they resume their uptrend. Within our equity portfolios, our valuation and trend models have kept us overweight U.S. stocks. From a style perspective, we continue to favor momentum and quality at the expense of our fundamental index funds with their value bent.”
— ACM Quarterly Commentary, August 10, 2015
“…Amid all of this turmoil, we are pleased to report that our portfolios were more or less unscathed… Our proprietary quantitative models… led us to make a few key decisions that enabled us to preserve our capital in these treacherous markets. (1) In May we reduced equity exposures to 10% below target allocations across our various risk offerings, and more or less, have remained there since; (2) Within our equity exposure, our portfolios were tilted toward the better performing U.S. Markets; (3) From an equity style perspective, we emphasized better-performing MOMENTUM and QUALITY (think growth stocks) all year; (4) A good portion of our non-U.S. stock exposure was hedged to the U.S. dollar; (5) We did not have any direct exposure to commodities or commodity-related stocks;…”
— ACM Quarterly Commentary, Feb. 9th, 2016
“…The key development in the third quarter is that our trend models for stocks have turned positive for the first time since the spring of last year. As a result, we have been adding equity exposure across client portfolios at the expense of fixed income and alternative funds. Generally speaking, equity allocations in our portfolios are back to neutral policy targets for the first time in about fifteen months. A large portion of our equity additions was directed toward emerging market stocks, which continue to be the standout in our proprietary valuation/trend models.”
— ACM Quarterly Commentary, Oct. 28, 2016
“…Looking forward, all signs seem to point to another positive year for the stock market. The economy is picking up momentum and market technicals are strong. Higher interest rates will eventually give the stock market some trouble, but not off of these extremely low levels. Politics aside, the Trump victory seems to have given the stock market a second wind and has increased the likelihood that this seven-year-old bull market could move into bubble territory.”
— ACM Quarterly Commentary, Feb. 7, 2017
_________________________________________________________________________________________________________
GLOBAL STOCKS FELL MORE THAN 20% RELATIVE TO CORE U.S. BONDS FROM THEIR MAY 2015 HIGH TO THEIR FEBRUARY 2016 LOW (U.S. QUALITY AND MOMENTUM STOCKS DECLINED BY ONLY ABOUT HALF THAT AMOUNT). SUBSEQUENTLY, FROM THE END OF THE THIRD QUARTER 2016 AND THROUGH THE END OF 2017, GLOBAL STOCKS OUTPACED BONDS BY MORE THAN 25%.
_________________________________________________________________________________________________________
Read More ACM Market Calls >>
Read Next Timeline Item >>