Allocation History

Cabana’s Allocation in Response to the Economic Cycle

• Scene

  Broad Themes

• Bullish

  Typical of a bull market cycle resumption following a correction or bear market. Risk assets, such as equities, outperform fixed income assets such as treasuries, bonds, preferred stocks and REITS.
• Moderately Bullish

  Typical of an uptrend within a cyclical bull market cycle. Equities of all types generally outperform. Fixed income and dividend paying assets may also be attractive.
• Cautiously Bullish

  Typical of a pullback within a cyclical bull market. Defensive equity sectors as well as fixed income and dividend paying assets outperform higher beta risk assets.
• Moderately Bearish

  This scene represents the typical uptrend within a larger, cyclical bear market. Income producing assets, including preferred stocks, corporate grade bonds and dividend paying large cap equities outperform higher beta assets.
• Transitional Bearish

  This scene represents the transition from cyclical bullish conditions to bearish conditions. Due to sustained deterioration in domestic market conditions, international stocks, commodities, and U.S. Treasuries are relatively attractive.
• Bearish

  This scene represents a true bear market or significant correction. Risk off assets are attractive. These include U.S. Treasuries, gold and the U.S. dollar.

Repeating Economic Cycle

* Markets are a leading indicator (within 6 to 8 months) of the economic cycle, which is considered when determining the asset allocation.