Tactical money manager goes to cash (look out below)Article added by Roccy DeFrancesco on August 7, 2014
Roccy Defrancesco

Roccy DeFrancesco


Joined: May 24, 2006

When I heard that my favorite low draw-down risk/tactical money manager went to cash, I figured you would want to know.

Many of you have heard me sing the praises of a tactically managed strategy that has gone 23 years without a down year and has averaged a net 9 percent rate of return (year ending 2013).

When the market crashed in 2000-2002 they were positive.

When it crashed again from 2007-2008 they were positive.

The following charts are about as powerful as it gets.

The following chart shows the periods when their strategy went to cash (top line with green periods which represent being in cash) versus a buy and hold position (bottom line).

The following chart shows the negative returns of the S&P versus their strategy (they do have negative months but have not had a negative year end in 23 years).

The following chart is 2011 when they went to cash seven times during the year due to that year's insane volatility.

Does the fact that a rock star tactical money manager went to cash mean that a crash is coming?

Well, I can't say that for certain, but I know that they have a proven track record of avoiding crashes — and you can take the information in this article for what it's worth.

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