What's the best way to handle the U.S. stock market's current volatility? Avoid it.
Meridian Investment Management's global sector allocation portfolios shifted out of U.S. equities into foreign stocks, real estate and U.S. bonds beginning at the end of 1995.
Such a large-scale shift is rare for the firm's Frontier Allocation Series global portfolios be cause ``the best bargains of the world emerge in frequently. We need a compelling reason to replace one sector with another one and that reason is we've found greater expected returns elsewhere,'' said Craig Callahan, CIO.
Currently the aggressive global asset allocation portfolio has 37% in foreign stocks; 30% in U.S. stocks, its lowest allocation since 1994 and down from 42.46% in U.S. stocks as of Feb. 10; and 17% in U.S. corporate and high-yield bonds. The remaining 16% is in real estate.
The firm's aggressive portfolios are up 2.56% after fees for the year to date. The S&P 500 index is up less than 2%.