Sitting Out Asset Classes: Boring Is Not Always Bad

"All night he check, check, check." Teddy KGB in Rounders

In poker you fold a majority of the hands, and it can be pretty boring for amateurs to play that way. Most end up playing far too many hands for entertainment value. Sometimes it simply makes sense to sit out.

Following the GTAA model I published  - it's pretty boring, and it only makes about one round trip per asset class per year. But hey, boring this year is not bad. Personally, I'll just follow my model when it gives a signal, whether it is next month or two years from now. If you were following the model as published you would be up on the year, mainly due to the atypical allocation of 20% to commodities. Most of world betas are down around -15% YTD and -20% from their highs. REITs are getting clobbered down around -40% from the highs.

Anyway, here is an updated list of asset classes through 7/15 and listed alternatives. Gold stars go to the market neutral funds, managed futures, and of course the bear funds. Is GRZZX really up 40% YTD? That is pretty amazing work, Mr. Leuthold. Heebner continues his outperformance, up over 10% in 2008.